Co-Op: Rental Housing

Zoning and Land Use Codes may make it impractical or impossible for the farm, kitchen, and store to be on the same property.  If the farmland has a home, we can put it to use as a rental property.

We may be doing our thing and purchase another property for more cropland, to establish an orchard, or to raise chickens.  If the property has a home, we can put it to use as a rental property.

It may be the group is limited on funds and is barely able to make ends meet.  Perhaps the downpayment can be put together, but the mortgage and utility bills can be a strain on a small group of people.  Land with a home offers an advantage in that the home can be rented.  

We've got reasons to acquire land.  We've got plenty of options for using the land.  In most cases, we'll want land with a well, septic system, power, and a culvert for road access in place.  The cost of installing these systems on an undeveloped property can be significant, and we'd have to come out of pocket immediately.  A property that has a home will already have these systems, and would be included with the mortgage.  Renting that home would go a long way towards paying that mortgage.

Once again, I'll use my place as an example.  The downpayment was $5000 and owner financed.  The mortgage is $500/month for 7 years.  It has an antiquated mobile home in pretty darn good shape, about 1000 sqft, with 2 bedrooms, 2 porches, a laundry room that could be made into a bedroom, and the back porch could be converted to a bedroom.  The property is 3.6 acres, is fenced and cross fenced, has a fine garage and a 16x16 livestock shelter in the back.  The home is fully functional with new appliances, new HVAC unit, and really good water.  As a rental, this place would easily command $600-700/month, enough to pay the mortgage, insurance and property taxes.  

Let's say the place was purchased by the co-op.  To rent it out the place could use a paint job inside, the front steps should be replaced, as well as the unsightly floor covering in the dining room.  Less than $1000 would dress the place up.  We would do well to add a bathroom to the garage and some wire fence to separate the home from the land.  This will cost us another $2000, with the result being a rental home and a useful field with a structure and utilities.

The garage would be kept for use by the co-op.  Tool storage, a bathroom, a place to take a break from the hot sun.  The tenant would have the home and some yard for parking and BBQs.  Since we'll be using electricity and water, the utilities would be ours.  Bump the rent, include utilities with the rent.  If we've done our job right, we've got a few hundred people involved.  There's a good chance of renting the place to someone in the group and keeping it rented.  Continued success means we have 3 acres of land with a structure and systems for $8000 down.

 

Cooperative Enterprise, Plan Outline