Thought Experiment - Cottages

Einstein was famous for many things including the theories of general and special relativity. I also learned that he was known for using a technique to dream up the answers to his questions of the universe, called “Thought Experiments.” This series takes the concept of thought experiments to different places. Today’s thought experiment is Cottages!

Where there is a will there is a way. In today’s America over 15 million people or more are want a job that is not available. Many of these have or will lose their home. Some will be in search of new affordable house, while others will battle to hold on.

Many of us or not in such dire straits but live with a desire to improve our lot in life. You put in more hours or get a second job. We start side businesses or just try to get every penny’s worth of use of our stuff through frugal living.

There are a million ways to reduce your expenses or increase your income and now we have one more; cottages.

Yeah, go figure a relic of the 1800’s is making a comeback albeit at a slightly different level on the socio-economic ladder.

People are starting to build small self-contained living quarters in their backyards. These are not the Mother-in-law apartments or converted basements, these are free standing buildings.

For more details check out this article from the U.S.A. Today. Writer Judy Keen shares the story of John Stoeck building a 437 square foot cottage for $50,000. He expects to generate nearly $11000 in rental income each year!

The drive to build these comes from several sources. One of these, amazingly, is local government. With a desire to prevent the bedroom communities of cities from being razed for high-rise condo’s and apartments a few innovative communities have figured out how to capitalize on space that is readily available to increase the population density without losing its historical charm.  There is also the added advantage of creating many more affordable living options in and near city centers supporting the lower-income workforce.

For some individuals encouragement from their city is only additional fuel to their desire. While in a few cases these dwellings are being built to house aging grandparents, others are purely investments.

In other cases these cottages are being used to save investments. A few enterprising owners struggling to make the mortgage payments have decided to move into the cottage in order to rent our their primary residence. With the mortgage covered by a renter, they can sit comfortably on the same property to oversee the care of their investment.

Rental properties are a great wealth builder when properly managed. But the risks associated with rentals tend to scare many off. Would having a rental within eyesight make being a landlord a little easier?

Readers: How about you, would you consider building a cottage on your property? Would you rent it out or move in?

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photo by crabchick

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