is it bad to own rental property that has a basement

10 Replies

It really depends on the property. The biggest issue, at least here in Columbus, OH, that causes damage to properties is simple grade, gutter, and downspout maintenance. If water is running away from the property you should be fine in most cases. There are areas of the city where the sewage infrastructure cannot always handle the water but generally that is not a problem. 

That being said, I like slabs because it's one less thing to worry about. I wouldn't walk away from a property with a basement by any means and I own properties with basements and on slabs. 

Hey Jayden,

I invest in Houston, TX and Athens, OH. Houston has zero basements due to the clay in the soil and Ohio almost always has basements for SFRs.

@Jonathan Styer is correct - simply having proper drainage prevents most of the issues. 

I definitely wouldn't walk just because a property has a basement. 

It's a mixed bag.

Pros: easy to work on & locate mechanicals; possibility of expanding living areas; provides ready storage potential.

Cons: flooding/dampness/mold/mildew issues; entry potential for rodents/pests.

About 2/3 of my houses have basements. Of those, half have had water/dampness issues that have had to be solved. I would rather have a house with a basement that had no water issues than a slab or crawl space, but I'd rather have a slab than a house with a basement with water issues (especially if the surrounding topography is largely flat). 

Some tenants actually prefer homes with basements for storage and a location to put washer/dryers. It can save space for living square footage and actually add value.

I have side-by-side duplexes both with basements and on slabs. Prospective tenants for the duplexes on slabs are often disappointed there isn't a basement for them to fill with junk, but I don't have problems filling those units. My duplexes with basements have cost me a decent amount of money for waterproofing and foundation repair, but I built those items into the purchase price on the front so it's not a big deal.

All that to say, if you buy right it doesn't matter which way you go.

Some people say there are two types of basements: those that flood, and those that haven't flooded yet.

I love basements. They are cooler, darker, quieter, etc. You just have to watch that they are sealed properly and that water drains away from the foundation to prevent problems. Even then, if a pipe breaks inside the home, all that water will drain into the basement. It's a risk you have to consider.

Great question.   In some locations, especially colder climates, basements are simply very common.

1.  Finished basements are risky for tenants.  Water inherently gets in a bit.  And you have a mold risk or risk of damaging their contents.

2.  I prefer unfinished basements in rentals and I put into leases that any items stored in the basement are not protected from water infiltration.  

3.  I even advocate / demand that tenants put their washing appliances up on blocks, just in case there is any water.

Occasionally, water comes into a basement when the street sewers are clogged after a heavy rain.  Sometimes basements have seepage because of high ground water levels.  Foundation cracks are actually easy to fix

@Jayden Hamilton for me a basement is not a decision point, it’s a feature. I’d check if it leaks in inspection. I would get a grading expert, foundation specific inspection ect as an add on to my general. I’d budget another $500 in inspection if needed to make sure there were no issues. There are local people who know the area and builds, and which houses leak. I’d bring an expert on site day of general inspection.