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!

Money, rental, income, cottage, saving, mortgageWhere 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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7 comments to Thought Experiment – Cottages

  • While cottages in the backyard are a wonderful idea be careful to check with your county zoning laws as this violates ‘single-family dwelling zoning’.

    We found out the hard way when we converted an oversize 2 car garage into a wonderful little studio, starting renting it out and were shut down by the county as this was now considered ‘multi-family (2 homes, residences, families on 1 lot) and we only had zoning for single-family. We could have went before the county and requested zoning changes but it was the neighbors that turned us in and when you request a zoning change all properties that abut yours are invited to the hearing to have their say. We kinda knew what they thought already….

  • Hmm, one man’s cottage is another man’s move towards an urban slum. I know US yards are a lot bigger than here, but I’m not sure that’s the best way to develop urban conurbations. I’d prefer a self-contained extension to the main house perhaps.

    I thought you were going to say live in a cottage. Now that’s a way to save money! 🙂
    .-= Monevator´s last blog ..Weekend reading: Revolting taxes =-.

  • Although I love the idea of rental property, I would not want to have my permanent residence occupied with a small cottage and a tenant. It’s just a personal preference I guess.

    .-= Roshawn @ Watson Inc´s last blog ..Savings Down, Spending Up but What Does it Mean? =-.

  • I have served as chairman of zoning and planning board for our city. And FGE above is exactly right. The neighbors are usually very vocal if they think it might affect their property values, or increase neighborhood traffic.

    One way to find out, of course, is to ask them their opinions, before spending any money. Most zoning administrators for city/county can also let you know what your chances are of being approved-they aren’t the final decision makers, but usually know which way the wind blows.

    Some people love being a landlord and having a close neighbor, others would hate it. My wife and I love our privacy-so that would not be our choice to add a neighbor in the back yard-especially one that wanted me to unclog his toilet!!!
    .-= Dr Dean´s last blog ..Post-Transaction Marketing: Helpful Links, or Ripoff? =-.

  • @finallygettingtoeven – Thanks for the advice! I am sorry it didn’t work out for you but it is inspiring!

    @Monevator – As I consider the half of our house we virtually don’t even use I can’t help but think the cottage is the place to be. What is really sick, is that we purposefully purchased half the house that most in our area own!

    @Roshawn – Completely understand. I’ve always been intrigued by rental property while my wife is repulsed by the idea. It is not for everyone!

    @Dr. Dean – Thanks for your perspective. If the tenants want to cover the cost of my living expenses, I think I could be persuaded to plunge a toilet or two… but like I said… it is not for everyone!
    .-= LeanLifeCoach´s last blog ..5S In Action – Organize and Simplify =-.

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