There are many advantages to owning a home with a guest house. A guest house can be used by family and friends when they visit, or by you as a private study or workshop. There are also financial advantages if you choose to rent it out: income toward your mortgage and taxes, tax benefits (a huge plus in today’s tax climate), the ability to switch homes should you need to lower your expenses, and a way to build wealth and save for the future.
If you are considering buying a property with a guest house, you or your real estate professional will first want to look into a number of legal factors. Do local laws allow guest houses, and have all required permits been obtained? Can the guest house have a full kitchen, or is it limited to a hot plate and a microwave? Are there any local laws that could prevent you from renting out both homes, in case you have a job transfer and want to keep the property as an investment? Is there any restriction on the length of rentals—are both short-term and long-term rentals allowed? Finally, are there any rent control laws that you should be aware of?
In short, a guest house can be a wonderful feature that brings both flexibility and financial benefits, as long as you do your legal research before purchasing.