When I retired, I bought a new house with a detached garage. My plan was to convert the garage to an Auxiliary Dwelling Unit or ADU, sometimes called an In-Law home.  By renting out my ADU I generate consistent post-retirement income as well a tax write-off for related expenses.  I completed construction on the ADU 2 years later (delayed due to COVID) and successfully rented it to a mid-twenties guy who used his new MBA to get an entry-level office job in my area.  He was an excellent tenant but left me in August when he found a better job on the south part of town.  

 
Over the time he was here (unaware of my sugaring) several of my SB's mentioned they would love to get a place similar to my ADU so they could move out on roommates and/or parents.  I price the unit on the high side of the market for a variety of reasons, and when an SB casually asked about the rate, they all said it was too high for them. And they were correct.  

 
Now I already hear your screams telling me NOT to ever consider renting an ADU (or spare room) to a current or past SB! Have no fears, as I will never, ever do that.  

 
But for those of you who may not see the potential problems, or who may actually think there are advantages, let me explain why this is a terrible idea.  (Note that I differentiate this case from those SD's who agree to pay an SB's rent somewhere other than his home, or who agree to rent a separate place and let his SB live there. That's a totally different use case and has totally different issues associated with it.)  

 
1. Renting to an SB who by definition cannot manage her finances is a guarantee of missed rent payments, which leads to,  
2. The SB will invariably suggest BCD in lieu of rent, which means that you lose rental income, and risk her developing some undeserved sense of entitlement.  
3. If she continues to miss rent payments, or is a bad tenant for other reasons, think about how hard it would be to evict her if necessary. Are you prepared to testify at a state Housing Commission hearing about your arrangement with her?  
4. If she literally lives within sight of your front or back door, how do you expect to bring other SB's home (assuming you will use your home for BCD)?  
5. If you literally live within sight of her front door, how will she expect to bring home other SD's?  
6. There is a high likelihood that she will be frequently knocking on your door for cash or other requests. This is the exact opposite behavior you want from a rental tenant.  

 
There are other reasons, but you get the idea...  

 
What have I done when an SB starts to ask or suggest that she could rent the ADU? I kill that idea asap. Usually, I just say she will need to apply with my Real Estate agent, like all others, and I don't think she will qualify. If needed I can also remind her of my no pets, smoking, vaping, etc., policies. Finally, if she still pushes, I ask if she can afford the rent. The answer is always no.  

 

Have any of you ever considered renting a spare room or ADU to a SB? Why? How did it work out?  

 
Life is good

 
The Cat