Advice and Opinion

The global rise of multigenerational and dual living

Tough economic conditions globally are increasingly forcing people to look for innovative housing solutions, and among the most popular current trends are dual living that provides a rental income stream and multi-generational living that cuts down on costs.

Both options benefit from – and depend upon – numerous people peacefully co-existing on the same property, though, which can present unique challenges. And if you’re considering converting a property for dual living, there are also practical and regulatory issues that need to be taken into account and addressed.

Multigenerational living is a growing world-wide phenomenon that’s becoming more prevalent as spiralling costs make it difficult for families to make ends meet and for youngsters to leave the nest.

And according to Lew Geffen Sotheby’s International Realty Executive Director Sandy Geffen, who has more than three decades of property industry experience under her belt, South Africa isn’t immune to this trend.

“Young adults are living with their parents for longer, affordable retirement accommodation is in short supply and home ownership is frequently delayed for years as young families and first-time buyers now have to save for bigger deposits,” says Geffen.

According to the last South African Census, just over 50% of the country’s households are multi generational, reflecting a study reported in Time Magazine last November noting that more young adults (aged 18 to 34) in the United States are living with their parents now than at any time since 1940.

Geffen says local estate agents are reporting an ever-increasing number of queries for properties that will accommodate extended families.

And while economic necessity may be the current primary driver behind families needing to share properties, Geffen says there are several advantages to this type of arrangement that mitigate the reduced amount of personal space.

“There’s always a silver lining to be found in any challenging situation and in this instance there are several, even if it’s a case of three generations squeezed into one not overly large home”.

“Shared expenses ease the financial burden and allow for a better quality of life. Sharing a home can also strengthen family ties in a world where the traditional family unit is far less common than a generation ago.”

Geffen says that multigenerational living can solve myriad day-to-day hurdles faced by modern households.

“Few families today can afford a stay-at-home parent and many are finding it difficult to cover the costs of childcare, so in this way the need for care for both grandchildren and grandparents can be seamlessly accommodated”.

“Multi generational living also offers increased security for homes as they’re not unoccupied for long stretches during the day, as well as for elderly family members in general, who would be more vulnerable to targeted crime if they were living alone.”

Geffen does note, however, that this style of living will create hurdles because of the differing needs and expectations of the inhabitants, especially if they span generations.

“Planning, flexibility and ground rules are essential to make it work for everyone in the long term, because unless all parties buy into the household ethos it can go horribly wrong.”

Geffen offer the following guidelines to avoid pitfalls and maximise the benefits:

· Discuss and agree on each person’s responsibilities from the get-go and if anyone requires care or assistance, establish what this entails and how it should be implemented;
· Discuss and establish boundaries together as they must be understood and respected by each household member, from the youngest to the eldest;
· Learn to pick your battles – there will be general disagreements and niggles, but most won’t be worth a full-scale argument; and
· It is important to remember that living on one property doesn’t mean living in each other’s pockets. Everyone needs a break from each other and time to themselves.

Dual living with a paying tenant on the property is also an increasingly attractive option for cash-strapped home owners and prospective buyers looking to reduce their mortgage burden or purchase in high-demand areas that stretch their budgets.

Geffen says: “A rental income can help to pay off your home loan faster, and also enables first-time buyers to enter the market sooner. It might take a bit of time to find the right property, but it’s worth the effort in the long run.”

And in a country where fewer than 10% of retirees are financially independent and the Reserve Bank notes that we have one of the worst savings records in the world, Geffen says dual living is also an excellent way to help fund retirement.

“A rental income enables younger home owners to save in tough economic times. At the other end of the scale, active retirees can stay in their family homes longer knowing their living expenses are subsidised by an on-going rental income stream.”

The most important factor for successful dual living is to ensure all inhabitants enjoy a measure of privacy. Geffen advises home owners to carefully consider their needs and decide whether a separate, self-contained dwelling would be most suitable or if converting or extending existing structures would suffice.

“This applies to both current home owners who have the space to erect a separate dwelling and prospective buyers looking for conversion properties”.

“If you want to buy and build a separate dwelling, it’s imperative to first check whether you’d get local authority planning permission before taking the leap. And regardless of whether you intend to convert or build separately, always consult a reputable architect who’ll draw up plans that don’t contravene bylaws or zoning regulations”.

“Cutting corners to save a few rands in the short term often proves costly down the line, especially when you decide to sell and the sale is delayed or lost because the property plans don’t match the current structures.”

She also cautions home owners to guard against the most common pitfall, over-capitalising, which will not only diminish return on investment in the long term but could also defeat the object of earning a decent income in the short term because the costs outweigh the revenue.

“It’s always advisable to thoroughly research the local market and to consult a reputable and experienced estate agent who’ll be able to offer sound advice about rental prices and market trends in your area.”

Geffen concludes: “In the current economy, whether you want to off-set the rising cost of living or simply create a new income stream, dual living makes a lot of sense. If implemented correctly it has far more benefits than disadvantages and will add substantially to the value of your property when you eventually sell.”