Rent the Backyard (YC S19) wants to build a studio apartment in your yard • Hacker News Board

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#101

Post by tbyehl » Fri, Jul 19, 2019, 6:03 AM UTC

tbyehl wrote: post #97

quickthrower2 wrote: post #84

I don't like the idea of taking a free and simple house, which you can sell, and myring it in a contract with another company (no less a startup!) so that when I want to sell, I need to explain the agreement I have with this other party to annex the land. I reckon it would devalue the house. I think people would be better off borrowing the money and building their own. Where I live (not in US) you might spend say $10…

Worse than that, the article states that you have to buy them out as part of a sale. My house has an ADU and came with paying tenants. Zillow thinks my place is worth about $30K more than the average on my street... but I also have a pool (couple others do) and am the only one with a legit 5th bedroom, so I'm thinking the market value of that ADU is roughly nothing.

As another piece of anecdata, my previous home had a spacious and nicely finished detached garage in addition to a single-car attached. It values the same as other similarly sized homes in the subdivision without a detached garage. It definitely had value to me as a workshop/office/man-cave, but not-so-much the market at large.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#102

Post by kevinyun » Fri, Jul 19, 2019, 6:07 AM UTC

gxespino wrote: post #90

quickthrower2 wrote: post #84

I don't like the idea of taking a free and simple house, which you can sell, and myring it in a contract with another company (no less a startup!) so that when I want to sell, I need to explain the agreement I have with this other party to annex the land. I reckon it would devalue the house. I think people would be better off borrowing the money and building their own. Where I live (not in US) you might spend say $10…

Who has time to manage a construction project? Just show me where to sign and send me my monthly checks.

Reminds me of this legendary comment: https://news.ycombinator.com/item?id=9224

Although I appreciate some of the argumentative counterpoints, most of the time it's from people who underestimate how lazy human beings are, and that people are willing to pay for simple services

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#103

Post by sburl » Fri, Jul 19, 2019, 6:10 AM UTC

crimsonalucard wrote: post #22

In the bay, rent is so high this makes no sense. Why would I give away 50% of rent for something that can pay off my investment in one to two years? Even with the headaches 50% is not worth it. 20% maybe.

Unfortunately, a fully-featured unit is really expensive. For a unit like the ones we build (full bathroom with shower, kitchenette, on a full foundation) you'd be hard-pressed to build a unit for less than $100k. This number assumes you're spending a whole lot of your time working on the project. People are building these units and we're excited to see the stock of housing rise in the Bay Area but most people won't make the jump to borrow the money on a home equity line of credit and become a part-time construction manager.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#104

Post by [deleted] » Fri, Jul 19, 2019, 6:24 AM UTC

stcredzero wrote: post #39

staunch wrote: post #36

Earlier quoted context omitted.

All the companies doing this seem to be small/unsuccessful/brand new. Maybe there's some fundamental problem with the business or maybe no one has nailed it yet?

What if an Amazon company started putting together such kits? Perhaps there would be a way this could be done for small margins, sort of as a no-loss-leader to generate more Amazon customers?

[deleted]

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#105

Post by sburl » Fri, Jul 19, 2019, 6:27 AM UTC

staunch wrote: post #36

stcredzero wrote: post #34

Earlier quoted context omitted.

It would be neat if there was a (high quality) $50k kit homeowners could buy and assemble themselves, almost like IKEA furniture. There was a New England company that sold complete kits for small houses with pier and beam foundations, designed to be constructed by two fit adults, including the fasteners! I think they went out of business in the 2000's. EDIT: I just found another company doing almost the same thing: h…

All the companies doing this seem to be small/unsuccessful/brand new. Maybe there's some fundamental problem with the business or maybe no one has nailed it yet?

A couple of people actually do sell kits on Amazon for ~$10-50k (https://www.amazon.com/Jackson-275-119-Sq-Ft-Tiny/dp/B07SPTW...)

I can't speak to other kits -- some of the shipping container ones actually seem like they might work for some people (https://simpleterra.com/) but we looked into working with Amazon kits and it's really tough. The two main issues are on-site work and bringing the kit up to a livable standard.

On-site work is expensive -- think $50-80k depending on the site to secure a building permit, level the ground, and pour a foundation. There are some new types of low impact foundations (closer to $15k + $20-30k for permits) we've seen and are exploring but I don't know we could do that with a kit.

The main issue is with turning the kit into something livable. Kits are usually difficult (and loud) to assemble, the wood needs to be finished so it doesn't rot, they usually aren't designed to accommodate plumbing, gas, and electrical lines, and unless you want to spend hundreds of hours of your own time to learn those skills, you'll need to manage and hire 5-10 professionals which quickly eliminates the initial cost savings.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#106

Post by sburl » Fri, Jul 19, 2019, 6:36 AM UTC

dtornabene wrote: post #6

this should do wonders for the housing crisis, outstanding work guys. edited: its so fitting that on the front page right now there at least two other stories covering real estate and the housing crisis

Growing up on the East Coast, I was confused when I first visited the Valley and learned about how expensive housing is. People that don't work for big tech companies can't afford to live here anymore and even workers just starting out at Google are spending >30% of their income on housing. I'm afraid of what that means.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#107

Post by sburl » Fri, Jul 19, 2019, 6:41 AM UTC

refurb wrote: post #86

opportune wrote: post #11

Earlier quoted context omitted.

>increases in property taxes Not an issue in the bay area >the taxable revenue from the rental and its impact on personal taxes Progressive income taxation should make this moot. Also many expenses are likely tax-deductible. Combined with FHA terms, mortgage interest deduction, etc. and this is actually rather tax-advantaged over regular rentals

Not an issue in the bay area Why not? Prop 13 protects the homeowners from higher taxes if the property appreciates, but as far as I know that doesn’t cover renovations. Otherwise you could buy a beat up $1M, year it down and still pay the same taxes.

The way this works with ADUs is a blended approach. The existing home's tax status is protected by Prop 13 and the ADU as a structure is appraised. While adding an ADU adds considerable resale value to a home, tax assessors don't typically value them that highly. It's also worth noting the ADU also becomes protected under Prop 13 after the initial assessment (https://maxablespace.com/granny-flat-tax-implications/)

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#108

Post by Reedx » Fri, Jul 19, 2019, 6:50 AM UTC

AnimalMuppet wrote: post #46

I see a few issues. First, the local zoning commission may not allow such units. Second, my dog uses the backyard on my dog's schedule, not the renter's. And the renter may dislike walking through a minefield to come and go. Third, where's the renter going to park?

My neighbor in the Bay Area built a tiny house in their backyard that they rent out.

1) It was allowed 2) no dogs 3) they park on the street

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#109

Post by madiathomas » Fri, Jul 19, 2019, 6:53 AM UTC

This can be a huge success in South Africa. Backrooms are very popular in big townships and provide residence to more than half of townships' population. The good thing is that the laws already allow such kind of dwellings and you won't have to deal with NIMBYs. Best of luck.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#110

Post by mirimir » Fri, Jul 19, 2019, 7:02 AM UTC

It's a cool idea, for sure. Both for creating affordable housing, and for increasing the affordability of existing housing.

But as others note, there could be major complications at sale. Especially if the apartment doesn't increase the market value enough to cover the buy-out cost.

Wouldn't it be more straightforward to just build pads and hookups for trailers? Or even for RVs? That'd be much easier to untangle at sale. And it'd probably cost less.

Perhaps the startup could convert shipping containers to apartments. I've read about German ~gypsies that do that.