Your Shed to Granny Unit Conversion for Passive Income

Why Convert Your Shed to a Granny Unit?

Why would you want to convert your shed to a granny unit? The reasons are as varied as people’s personal situations. The most common reason for converting your backyard shed to a granny unit is for a passive income source. It’s a very individual decision to convert a shed to a granny unit in your backyard and you need to take into consideration several factors.

Examine your why. Your why will be what motivates your building experience of taking your backyard shed to a livable granny unit, no matter what purpose you pursue with the finished project.

Good Reasons to Convert Your Shed to a Granny Unit

Adding a granny unit to your home can also add to your property value because of its multiple ways of adding value to your property. We have thought of several reasons that make monetary sense and personal sense to build a granny unit and we share those with you below:

Housing for Older Parents or Grandparents:

For your family, a granny unit conversion could be an affordable alternative to a nursing home or assisted living space for your parents or grandparents. The cost of a nursing home room can approach over $7000 a month.  An assisted-living facility can cost more than $3,500 a month which is a more independent approach to housing for mature adults. If you were to rent your granny unit to your family member in most areas the cost would range from $700 to over $1500 a month, but definitely so much less than other housing alternatives.

Granny Units Are a Good Source for Long-Term Rental Income:

If you are looking for a steady passive income source a granny unit can provide your family with a good monthly income as a long-term rental. Passive income in our economy today is an important way to help buffer your family from the rising cost of daily living expenses. Depending on your area, square footage, amenities, location, and other factors your granny unit could be a source of healthy income from a yearly lease, providing your family extra financial security.

Short-Term Rental Income:

A short-term rental can provide additional income for your family when not being used by family members. Whether you live in a city, suburb, or out in the country, you can market your granny unit as a short-term rental using Airbnb, VRBO, Homeaway, or your local community board. Short-term rental laws vary by area, so make sure you are allowed to have a short-term vacation rental before advertising. If you have your granny unit can be a short-term rental, it can be a great way to meet new people and make a passive income at the same time.

The Shed to Granny Unit Conversion Process

Converting your shed to a granny unit is simple, but you need to follow certain steps to make it as easy as can be. Also, the process will be so much easier if when you built your shed you rough plumbed in plumbing and electrical. See some of our suggestions about the conversion process below:

1. Before you convert your shed to a granny unit make sure your property is approved for a granny unit. Check the ordinances, CCRs, and building requirements for your specific area.
2. Figure out your granny unit’s purpose, cost savings, or income-generating potential.
3. Find a designer or a design from a design book that can easily be adapted into plans that would be accepted by your county or city planning department for converting your shed to a granny unit.
4. Interview contractors with granny unit building experience or decide whether this will be a DIY project.
5. Get your financing in place; whether a credit line, home rehabilitation mortgage, refinancing loan with cash out, etc.
6. Get the appropriate building permits.
7. If you didn’t rough plumb electrical and plumbing when building your shed, this is the time to install with the end in mind.
8. Also, most sheds aren’t insulated to the level a livable space would need to be insulated to be both comfortable and cost-efficient. So, this is the time to upgrade your insulation with your climate in mind.
9. You might want to switch our windows, single pane for double pane, or add more windows for light in your granny unit.
10. Changing out a shed door for a residential door is simple. We are here to help and answer your questions.
11. Figure out how you are going to hook up to sewers, if you live in the city or suburbs, or if you live more rurally how you are going to hook your converted shed to granny unit to your current septic system.
12. Remain compliant throughout the entire conversion process with inspection requests, remember communication is key.
13. Get the final inspection from the building inspector.
14. Decorate your granny unit and then market or use it as you have chosen.

Converted Shed for Primary Residence Save Money

Converting your shed to a granny unit that becomes your primary residence, not only saves you money but also makes you money when you either long-term lease your home or rent your home as a vacation rental. Once your children have left home, a possible option is converting your shed to a granny unit and renting out your home to help pay it off.

Once you have paid off your home you can either keep living in your granny unit for a passive income from your larger residence or move back into your home and rent out your granny unit. Especially if you add a second story to your granny unit and you can still use your garage for storage, this scenario opens up multiple possibilities for income.

Shed Conversion Creates Multiple Income Possibilities

Shed-to-granny unit conversion can create multiple income possibilities for your family. If you have ever thought of starting a daycare business a granny unit allows you to have a daycare business outside your home but as close as your backyard. With what daycare costs these days starting a daycare or after-school activities center for older children is a good additional income stream to consider if you enjoy working with children.

Many types of home businesses can be run out of a granny unit. A granny unit can be set up as a massage studio, a place to teach Pilates, yoga, or meditation, and so much more. Your imagination is the key to making a good passive income from your granny unit. I know of one couple who rented their granny unit to an older man who needed a little extra care but still wanted to keep his independence; this was a win-win for the couple and also the older man and let his family know that  he had a living situation that benefited him in many ways.

Be sure to be in touch with Shed Windows and More about your shed-to-granny unit conversion. We have a wonderful selection of windows, doors, and tiny home parts that can help you in your shed-to-granny unit conversion.