According to Pew Research Center, a reported 57 million Americans lived in multigenerational households in 2012, which is twice the amount that did in 1980. In fact, the most famous house in America was recently multigenerational. Marian Robinson, Michelle Obama's mother, moved into the White House in 2009 to help raise the first daughters.
Multigenerational homes can create a win-win situation for the entire family while also saving on housings costs. Older members of the family can keep an eye on the children and aging grandparents can easily be cared for. With more American families choosing to consolidate their living situations, it's time for more builders to create unique floor plans to accommodate them.
A few smart builders —D.R. Horton and Lennar included — have already created home-within-a-home floor plans that allow extended families to live comfortably under one roof. Everyone can share an affordable house that has two private living areas. Each has its own entrance, kitchen, and full bathroom, as well as a shared door that locks from both sides. If you want togetherness, great. Want privacy? You’ve got it.
Because only a handful of builders currently offer this floor plan, there's still plenty of room for innovation. Here are three big reasons why you should explore adding multigenerational housing to your lineup:
--Multigenerational floor plans provide a call to action to several types of home buyers. To start, people concerned about caring for their aging parents will see this as an option that's cheaper and more appealing than a nursing home. On the other side of the coin, those same aging parents could seek out this option as they plan for the future. You could offer an already-affordable house to an entire family, where all of the adults will feel compelled to chip in on the mortgage.Further, this concept is also perfect for people who frequently entertain out-of-town guests, such as expats who have their families visit for months at a time. They could offer a private living space to visitors, allowing them to save money on hotels and rental cars. Guests can feel like they're a part of the family while not infringing on everyone’s space.
--Very few builders are constructing these homes. You have a huge opportunity to enter the market and offer something unique. Further, there is absolutely no competition on the used-housing market. You won’t be contending with a 10-year-old house down the street that offers the same type of floor plan. Multigenerational is a complete differentiator — and it will continue to be for at least the next decade.
When speaking with buyers, the most common hesitation I've heard is that the square footage isn't divided fairly. They think the primary living space isn't large enough. So for the same price, they purchase a traditional home and either tell Grandma, “ Sorry, can’t do,” or give her the guest room. You can be the builder that comes in and offers the best layout. Also, there’s an overall lack of awareness among consumers regarding multigenerational floor plans. People have never heard of them, so they don’t tend to search for them. With some great marketing, you could become the builder that popularizes shared family homes.
--The multigenerational floor plan makes for a very interesting investment opportunity. If an investor wants to rent out both halves, he or she could fill them with two unrelated tenants or an entire family. Either way, the returns would be more than those from traditional single-family homes of a similar size. Investors could also choose to live in one half of the house while renting out the other half, collecting a check every month from their next-door neighbor until their loved ones are ready to move in. Whichever route investors take, they can subsidize their mortgage payment in many creative ways. Further, they get to offer apartment-style living for apartment-style prices — in a property that's surrounded by new single-family homes.
If you're going to build five homes in your neighborhood, why not make a few of them multigenerational? As you get the ball rolling, be sure to cover three bases: Check on zoning laws, design an appealing floor plan, and invest in a strong marketing strategy. With the American population rapidly aging, you can count on a robust multigenerational home market for years to come. Be one of the first builders to offer this innovative concept.