How to make use of unfinished basement

Question

I checked several multi family listings this week, and found many of them have up fished basement. I was thinking of converting basement to storage. but since I have to renovate the basement anyway, are there any better ideas how could we make use of it?

Thank you all in advance.

Michael R. · Answer

I am a fan of storage in rentals because a large portion of the population likes stuff.  Storage in a basement is inexpensive and low maintenance - and adds value in my opinion.

One thing to consider is, what could you legally do with the space?  Does the basement have legal egress points? a separate entrance? If so - you may be able to make another room out of it if that were appealing. If it doesn't have those things - would it make financial sense to modify that space?

Other than that - if you finished it, what would it be used for?   What is your competition marketing their finished basements as?

I hope that helps.

Dawn Fu · Answer

thanks Michael, I think in the neighbor there are some landlords rent basement illegally, but also some just leave basement unfinished. I also think of maybe change to laundry room but I need to get higher rent then to cover utility cost.

Matthew Schroeder · Answer

If you can legally make it into a liveable/rentable unit, there is probably no better way to increase the value of your property.  Increased cash flow = Increased value!  Usually this would entail having an egress window, enough ventilation, etc..  You would need to check with your local authorities on the requirements.

In Colorado, we finished a basement & effectively doubled the square footage of one unit in a duplex, and as such, were able to get significantly more in rent.

Stephanie Minor · Answer

I'm new to REI but manage many properties that have lockable storage lockers in unfinished basements. Rent them out as you would a garage or parking space. However, you would want to keep an eye on what's being stored and lay out some rules, otherwise you may end up with fire hazards and pest-attracting items.

In my opinion, access to laundry increases value. If you can find some coin-op machines, that could help...

Andrew Syrios · Answer

You could potentially make them units, although they need egress windows to the outside and you would have to do a bunch of electrical and plumbing work. Usually, I think the basements should just be left as is, unless there the properties are upper end and adding units makes sense. Of course, if it's simple to add some storage there, go for it.

Dawn Fu · Answer

@David Stefanovic Thanks David, I'm pretty sure it's not legal to make it another studio in the basement, but I'll check.

David Stefanovic · Answer

If it's possible legally and per code to finish a studio or apartment in the basement, then that should increase the value of the multi unit property and create additional cash flow as well.