How to make my basement rentable?

Question

We're currently in the market for a primary residence with a basement to turn into a rental space. I was looking for advice on how to accomplish this. There's tons of unfinished basements in my area. What would make it a good rental for a tenant?

Marc Winter · Answer

@James Mc Ree makes good points.  Additionally, if you do go ahead with an additional rental, make sure to notify your insurance company that you are now a 2-family house.  Without doing so, you run the risk of a denial of claim if/when you file one.

Mark Taylor · Answer

My house is about 3000 square feet. A ranch home with 1500 up and down. In the basement we blocked off 500 sqft for our kids play room and then the other 1000 sqft is a basement apartment. It cost about $10,000 to remodel it to make it a separate apartment. We cut a door by cutting a window all the way to the ground and the kitchen and bathroom plumbing mostly existed. It’s a 1 bed 1 bath we rent for $1050 flat (utilities included). I think it’s worth it. We’ve been renting it for 6 years. Good luck!

Sean McKenna · Answer

If you are planning on house hacking. Just get a house with an extra bedroom or space to add the extra bedroom to the sfr.  I like the idea of a walk out basement.  The houses with a walkout basement are usually built with the intention of usable space in the basement.  House hacking is a great strategy to get started.  starting with an empty basement and trying to turn it into an additional dwelling is very difficult and costly. If you are considering a bedroom in the basement just always be thinking what if a fire happens. The bigger windows and large window wells really change the appearance of the property.

James Mc Ree · Answer

Strategy question: Are you looking to just rent your basement and share the rest of the house or turn your basement into a self-contained unit (kitchen, bathroom, etc)?  The latter means you essentially turn a single family property into a duplex.  Be sure the property zoning allows that.

Check to ensure your local zoning allows sleeping quarters in the basement.

Consider how your tenant will access and use the property.  Is the basement reasonably accessible with the house as is or do you need to build a separate entry point and do some paving?

I am sure I missed a couple other considerations, but if you've gotten to around this point you are at the design, permit and build phases for what you are going to build in the basement.  Consider all the costs you would invest to this point and rent you are likely to receive.  That will allow you to calculate your ROI and decide if it is worth it.

Account Closed · Answer

Lots of light! I think it's probably one of the most important/ overlooked items in a rental. This is especially important in a basement that already is limited on lighting. I use as many recessed wafer type LEDs as I can and install a dimmer so they can turn it down if its too bright for them. Make sure the dimmer is compatible with the lights or it may go wonky. Super easy to install yourself, and not too expensive.

What type of tenant do you want? Think about the tenant the wants to live in a dark below ground unit. If you forgo the light, that's the type of tenant you'll get. That said, I lived in a semi basement unit for a couple of years. But, I wouldn't have moved in if it didn't have good lighting to make up for it. Landlord installed lots of recessed LEDs.

Also, do some research on light color spectrum (generally 2700-5000k) for different types of rooms (kitchen vs. bedroom, etc). You'd be surprised at the difference it makes. Ok, I'll step off my lighting soapbox now...

Paris Scroggins · Answer

@Mark Taylor that's awesome! I was hoping to rent out a house I've been looking at as a primary residence. The basement is pretty nice and already has 2 separate rooms. I planned on sharing the chicken space and just turning one room into a living area and the other into a bedroom with a full bath. To do this, I was thinking about what I would need for a minimal in renovating; walls, flooring, etc.

Paris Scroggins · Answer

@Sean McKenna thanks for the heads up! I don't plan on doing a whole lot of renovating to make this a 2 unit home. I still want to keep it an sfr because it works better for my budget. The tenant and I would still share the same kitchen but the houses I looked at have their own fill bathrooms in the basement which gave me the idea. Do you think this is something worth house hacking? Or should I just continue to save to purchase a multi unit? With the financing I'm using currently, a sfr is more affordable than a multi unit.

Paris Scroggins · Answer

@Joshua Foch the lighting! I didn't even think to have dinner switches. Thanks for the advice! I want any home I decide to house hack to be as inviting as possible and lighting could definitely help that!

Paris Scroggins · Answer

@Marc Winter i know that insurance would be a factor but do you think it would change drastically if my home still qualified as a sfr? I figured renting out the basement may change things but would it be a huge difference if I kept my residence sfr?

John Teachout · Answer

If you want living space, get a home with a walkout basement. That gives you a door and usually egress windows without cutting big window wells. Also a basement that is drier, not one with a sump pump that runs every 20 minutes.

As mentioned, adequate ceiling height is important. Lots of good flooring options nowadays with vinyls that can lay over concrete without putting down a subfloor

It's doable, just be aware of things mentioned above.

How to make my basement rentable?

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