Just purchased a 3 bedroom with a rather large basement. 3 bedroom would catch about 1100 a month, however if I added a 4th bedroom in the basement, I'll get @ 1300 a month in rent.
The basement takes on water, needs to be partially finished, (walls/floor/outlets/lights/ etc) plus an egress window needs to be installed.
Rough numbers when all is said and done will be 9-10k, with the waterproofing eating up most of that estimate. This is a place I plan on holding for a while, but want to hear others opinions on what they would do and why.
Based on your numbers & assuming no additional increase in monthly expenses:
$200 in additional income per month X 12 = $2,400
$2,400/ $10,000(Initial Investment) = Return of 24%
Payback period 4 years and 2 months.
Looks like a solid investment.
I personally would finish a basement for resale but not for a rental. I would be concerned about water and mold issues due to misuse.
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