A Top Revenue Producing McMansion Investment Plan

The economic environment has changed for the long term. The years of loose cash to buy homes is over. With this, we have seen and continue to see large numbers of high end homes go to foreclosure. In some neighborhoods, we see homes like this seemingly abandoned and have to ask the question, "What will become of this asset?"

The atmosphere is muddied still more by other issues. With the Echo Boomers leaving home and the Baby Boomers rapidly becoming empty nesters, what are they going to do with these homes? Moreover, with so many new households being formed over the next 15 years, where will the housing come from? McMansions are part of the problem? Could they be part of the solution?

In my estimation, mcmansions may offer a singular housing solutions and profit opportunity for investors that are able to get these homes in areas where resident density in the home is not too restrictive. What do I mean? Consider looking at a mcmansion as a potential multiunit / shared housing solution. Many can or do offer inlaw suites. Many more could easily be modified to do so. Perhaps a sun room could become a living suite. Roommate living and renting with new locks on the bedrooms are a possibility. With these changes a 4 bedroom mcmansion could quickly convert to offer housing for 6 different renters. There are some living challenges to consider like how to keep the homes maintained, clean and in good operating condition. However, in a major metropolitan area this type of housing could offer as much as $700 to $800 per bedroom for individual leasors for the bedroom units and in the neighborhood of $1,000 for the suites. For a midsized mcmansion of 4,000 to 5,000 square feet, the potential exists for between $5,000 and $7,000 in monthly revenue. The rent would vary by market, but the point remains with the right configuration and the right renting plan very superior rents are possible. At the same time, you are doing the community a favor as this type offering will bolster tax revenues, reduce living costs, and prevent many homes from potential going under maintained or even abandoned.

Investors should be looking at these opportunities and considering if current regulations allow alternative use or modified use of the mcmansion inventory. This is a great opportunity to create cash flow and protect neighborhoods.

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