Mother-daughter houses, commonly referred to as multi-generational homes, are becoming increasingly popular in New Jersey. Childcare is expensive and the cost of living in NJ can be quite high to begin with. With the rising number of dual-working couples, and double income households, many families enlist the services of mom and dad to babysit. It’s so much easier to have everyone under one roof rather than having to drive the kids to Grandma and Grandpa’s place every day.
Combining two generations of families saves a lot of money on utilities and home and garden care.
This type of home is frequently misunderstood when it comes to alternative real estate investments. It can, however, be a good investment for the appropriate person or family. Learning about diverse forms of real estate can be exciting and profitable if you are an inquisitive investor who appreciates having distinct assets in your real estate portfolio.
This recent trend of mother-daughter / multi-generational houses is described in detail in a Business Week article.
Before you talk to a new construction home builder in New Jersey, or start visiting open houses for mother daughter homes, you and your family should talk about and determine your specific wants for the new home you want to build, buy, or renovate.
- Is a separate kitchen, living room, and entrance necessary for Mom, or will an extra bedroom and bath suffice?
- Is it necessary for Mom to have all of her rooms on the first floor?
- Is a finished walk-out basement a viable option?
- Would you consider reconfiguring some rooms for a mother section if the house was large enough?
What Is a Mother Daughter House?
A single-family residence with two distinct kitchens is known as a mother-daughter home. It essentially has two full apartments, but unlike a multi-family home, it does not have separate entrances for each apartment. A two-family home features separate entrances, utilities (in most cases), and living areas that are not connected.
What’s the difference between a two-family house and a mother-daughter house when it comes to residential property?
A mother-daughter house is essentially a house with two kitchens and at least two bathrooms that is laid out so that the two regions are (more or less) distinct but the same house. The term “mother-daughter” has no legal definition; it simply refers to a single-family residence.
Is renting part of a mother daughter home legal?
You’ll need to verify with your municipality to see if renting rooms is permitted.
A formal enquiry to the local Building Department is the easiest approach to determine whether you have a legal two family. Ask what kind of zoning does your property have? Is it a single-family home or a multi-family home? Is the use of your multifamily property grandfathered?
If it’s a legal single-family home, you’ll need to see a real estate/land use attorney to see if the property’s arrangement (several kitchens, for example) can be legally permitted to be a multi-family.
A mother/daughter house is defined as a home with two distinct kitchens, one for the parents and the other for the children. The house would be treated as a single-family home, but it would appear on the certificate of occupancy as a mother/daughter home.
It is an illegal rental if the owner rents to someone who is not a child or a parent. In those situations, the consequences of being caught could be severe. Zoning law infractions might be classified as felonies depending on the municipality.
Buying or Investing in a Mother-Daughter Home in New Jersey
Every real estate investor has their own set of objectives, which means that alternative real estate investments like a mother-daughter house may be more profitable for some than for others.
The location, demographics, and probable functional usage of a mother daughter house are all important variables in its profitability.
Towns with Colleges
College towns, as you might expect, are great places to buy a mother-daughter home. There aren’t many circumstances in which a group of people who aren’t related would want to live together, and because most families share a kitchen, paying for extra room isn’t usually worth it for tenants.
If a group of friends wants to divide an apartment, they’ll probably be prepared to spend a little more money for more privacy and room. They don’t require separate entrances because they know each other. College students make excellent tenants for a mother-daughter home for these reasons.
Of course, there are several factors to keep in mind while renting to college students. They may be rather dirty and destructive, and if you live in close proximity to your neighbors, you may face noise complaints.
However, before you dismiss the idea of owning a rental property in a college town, keep in mind that it is a rewarding financial strategy. Living on campus is extremely expensive for college students, so almost any private apartment would appear to be a bargain. If your mother-daughter home is close to a college, you can increase your rent to reflect the added convenience for students; they will gladly pay.
Families with Many Members
This is a challenging demographic to pin down, but catering to large families in need of more room is another approach to find tenants for an empty mother-daughter home.
It can be tough to comfortably afford rental rates in pricey areas. Families will frequently keep together and share accommodation to save money. College students who stay at home or grandparents who live with their children to care for grandkids are two examples.
While a mother daughter house may appeal to folks in these circumstances, how do you know if the mother daughter house for sale you’re looking at is in a good neighborhood? If the typical household income in the area you’re investing in is low compared to the average rental rates, there may be a demand for this type of living scenario.
If none of these scenarios applies to your situation or to the mother-daughter house you’re considering, consider whether it’s in a vacation area, like the Jersey Shore.
Often, large families want to vacation together – if the home can accommodate large families it may make a terrific Airbnb investment property. For large gatherings, one kitchen isn’t always enough, and if guests can spread out and become comfortable, they’ll gladly choose it over a standard single family.
As a result, having an Airbnb that is a mother and daughter property can help you acquire more bookings. This is especially true if your vacation home is near a family-friendly area that is attractive to tourists – like the Jersey Shore. With access to beaches, boardwalks, state and county parks, theme parks and sports stadiums, Ocean and Monmouth County, NJ are excellent destination spots for vacationers from the New York metropolitan area and beyond.
The advantages of owning this sort of home include having more space and amenities without having to pay the hefty taxes that come with a multi-family home.
Possible drawbacks to a mother daughter investment
If you’re thinking about buying a mother/daughter house, you’ll need to do your homework to figure out what the property’s legal classification is, what the tax assessor and the building department or zoning board think it is, and how much it would cost to fix, remove, or get approval for any nonconforming or illegal uses.
A mother daughter or multi-generational home is a single-family house with an attached or detached living quarters with its own living space, kitchen, and bathroom. What happens if someone who isn’t related to the homeowner lives there and pays rent? Isn’t that making it a two-family home? What are the ramifications for a homeowner who is caught by the Department of Buildings?
You could be found in breach of the law if you have a tenant paying rent (whether it’s a relative or not). Typically, problems commonly arise in this situation when a tenant fails to pay their rent.
Another potential disadvantage is that you’ll want to charge more for the extra amenities, which aren’t required by everyone. Finding someone to rent this one-of-a-kind apartment is a little more difficult.
You’re probably thinking that dealing with such a unique place will be challenging, and you’re right. A mother-daughter house could be less than perfect depending on the circumstances. However, you might be shocked to learn that in the appropriate location, these types of houses can become valuable assets.
With minimal adjustments, your current home could serve as a mother-daughter residence. If your zoning permits, you may be able to add a bedroom, cooking area, bathroom, and living room to your home. Converting the garage into an apartment is a less expensive option. If you have a living room adjacent to a den, you might be able to convert this area into a mother’s room. If you have a walk-out basement, it may be possible to convert it into an in-law suite.