Build primary residence and using section for STR
Hi, wanted to see if anyone has done this and what I have/haven't thought of yet. I'm in a HCOL (Seattle) area and looking to build my "final" home.
I was thinking of building a home and have part of the walk out basement used for STR. I'm hoping this would help offset my mortgage/buildout since it's in a central location and likely easy to rent out.
Would I be able to depreciate some of the buildout of the basement since it'll be for STR? If so, it would also be easier to self manage and so I can use it to offset my active w2 income instead of going for REPS status.
Appreciate any insight, thanks!
Most Popular Reply
@Carl Cheung I have done this in the Denver area (existing homes, though, not new builds). A walk out basement works great as a separate apartment for an STR. Self management is easy to do since you'll be living there, though I would definitely still recommend hiring a cleaner and using softwares that automate pricing, messaging, cleaner scheduling and payouts, etc. Since you're building your home, you have the unique opportunity to get ahead of one of the biggest complaints with basement apartments, which is hearing the people upstairs. If you can, try to insulate between the main level and basement as efficiently as you can to reduce noise between floors. I would also recommend making sure you can access the bottom floor from the top floor somehow 1) in case you ever want to stop renting out the basement and 2) so that it is a legal SFR (if you can't access one floor from the other, it may be seen as a SFR with an ADU, which could be an issue depending on your city's regulations). Renting out our basement as a STR, we have always covered our mortgage and lived almost completely for free - it's a great strategy. Hope that's helpful!