I live in an area of Florida that does well with seasonal rentals. 3b2b homes around me are listed at 7.5k – 12k a month for 6 months minimum commitment.
I have a 4b3b home and have thought of converting the master bedroom into a mother in law suite. I live alone so I would stay in the suite and rent out the main house. I don’t necessarily “need” the money but feel enticed by the potential income.
I estimate $15k of renovations to make the master bedroom comfortable for me to live in for 6 months. I would need to get an exterior door installed, plumb for a kitchenette, remove the walk-in closet for more floor space, add a wall to separate room from the rest of the house, and fence a portion of the yard for privacy. I plan on listing the main house for $5,250/m for minimum of 6 months.
I won’t have $15k cash to spend on renovations next year. I can easily budget to save $5k a year and do the renovations in 3 years. The alternative would be to take out a loan to pay for the renovations so that I can list it October 2026.
For a 6 month rental, I would need $4,500/m to recoup the cost of a loan (factoring in interest). It seems very likely I can rent for more than that but fear of the debt makes me hesitant to pull the trigger.
Please offer any encouragement to proceed with the loan, or wait 3 years until I have the cash. Thank you.
Should I take out a loan to convert master bd to MIL suite to get rental income, or wait until I have cash for the renovation?
byu/Rachelgal2 inrealestateinvesting
Posted by Rachelgal2
1 Comment
For 12k a month rental income for the main home. I would sleep in an unfinished mother in law suite, in a sleeping bag, on a bare plywood floor. In Florida, probably a cement floor.
That being said, a loan for 15k is not much at all if it facilitates that kind of income. It would seem getting the loan and getting it done more quickly would be a good thing to do.