Room and basement rental

8 Replies

Hi guys, I’m new to BP and I am so excited to have joined. I want to start investing in real estate in about 6 months. My partner and I have been looking at multifamily properties, and I was wondering if there are any legal issues with renting out rooms instead of units and also renting out finished basements in CT or NYC? Any advice and or tips are greatly appreciated. Thank you Btw I am currently working on getting my real estate sales person license in order to learn more about real estate...
@Keila Rosario Most basement rentals in NYC are illegal, but as im sure you know many do it. Typically its no Issue untIl you have to do an evictIon or when cIty fInds out. Read the article should have the details you are looking for..

Renting out rooms is fine, there are laws that permit how many people can live under 1 dwelling but if its 1 person per room it should be fine as long as room has Windows and a closet..

If you're planning to do Airbnb NYC has new requirements that will take affect soon..

Also keep in mind when renting out rooms in some markets Utilities are included in rent..

@Raul R. Thank you Raul. May I bother you for some strategies on how to start investing in real estate? Is contacting a real estate agent the first step or is going to a lender and seeing what I qualify for the first step?
@Keila Rosario Deciding on market you want to invest in is first step.. Finding a good realtor will point you on right direction w lenders. If you’re looking at a conventional loan expect to put down 20-25% down, if it’s a multi and you plan to House hack you might qualify for FHA loan and downpayment will be much less..

@Keila Rosario I suggest you do multifamily and live in one of the units. Don't know how much you have saved to get started but taking advantage of FHA is a much cheaper way to enter the NYC market. You might want to look into regulations regarding renting per room (I think NYC considers that an SRO - single room occupancy - and the building might need to be zoned for that). Again, just like with basement rentals, people do it, but they just haven't gotten caught lol. Also, if you live in one of the units you could do AirBnB for the other units and I don't think it would be considered a "hotel" since you live in the property as well (check that though). Good luck!