If you're cruising the real estate listings and decide that a multifamily compound is the thing for you, bear this in mind:
How do I know this? Because I was dumb enough to think in terms of buying "the property" (i.e. the land and everything on it) versus buying two houses on a piece of land, and it was only a chance comment to my broker about the front cottage versus the back cottage that cued him in to what we were trying to get a mortgage for. Suddenly, our lender decided we weren't buying a home, we were going into the property business, and the terms changed.
2. Your realtor may be all, "And we'll throw in a free home warranty for a year!" This will only cover one cottage...
3. ... Yet home inspectors will be more than happy to tell you that they'll need separate checks for the separate inspections they'll be doing on your property.
4. Be very up-front with your insurance agent about what you're buying and who will be living in it.
I always operate under the premise that lying to companies that operate fraud divisions is a special brand of stupid, but in the case of obtaining house and earthquake insurance for our property, I wanted to make sure that all my coverage would not be rendered null and void if an adjustor came out and was all, "Since we were unaware that there were two residences, neither is covered!"
5. Find out how your city feels about n-plexes.
A few weeks back, Phil and I received a letter from the City of Alameda informing us that we owed them $20 for a business license. Under city regulations, anyone who owns a multifamily property is a business owner/operator.
When Phil called the city to point out that my mom is going to be living in the back cottage and we won't be collecting rent, we were told that it didn't matter that we weren't charging rent. What mattered is the possibility of us charging money for a residence, so we had to register our federal business tax ID. Which we don't have. Because we're not running a business.
We stressed that we'd be happy to provide documentation attesting to our lack of real estate empire building and/or our commitment to multigenerational living, but we were told that the City of Alameda makes exceptions for no households.
In effect, the City of Alameda will be able to shake down this multigenerational family for years.
I doubt the folks who run the City of Alameda crafted this ironclad diktat as a way to generate a lot of revenue. But it will likely end up being a handy side effect: A higher proportion of adults now live with their parents that at any time since the 1950s. The numbers have been rising since 2010, and since a substantial percentage of adults living with their parents are, in theory, in their career-building years (approximately 11% of people in the 35-to-44 demographic, for example) and will be dealing with the recession-level salaries and fallouts for decades to come, this trend will likely not reverse itself. A Pew Research Report from last year summed it up starkly: "The old prosper relative to the young."
In short: the number of households like mine is likely to keep increasing. And we're going to have to pay the City of Alameda $20 a year to surf this trend.
From a big picture perspective, $20 a year is a pittance for what we're really doing. All the adults pooled their resources so that my mom and stepfather could build a community and age in place with loved ones nearby to help out as needed; so that my daughter will always come home from school to someone who loves her; so that my sandwich-generation husband and I will be able to streamline the logistics of balancing caregiving demands for whichever generation needs us.
I just don't think the City of Alameda should shake us down for the commitment to reinforcing stable family ties.
Phil's already spoken at a city council meeting about this. I'll be pitching op-eds in my free (haaaaaaaaa!) time. Over time, perhaps we can work to get the city regulation changed.
In the meantime, I wish I had known what was coming when we committed to this place. A $20 annual fee for no good reason isn't a deal killer -- but it is the kind of hidden expense I wish had been disclosed during the buying process.
(P.S. If anyone wishes to contact me about this, raise me on Twitter via lschmeiser.)