What's the best way to invest my empty basement

Seattle, Washington
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What's the best way to invest my empty basement

Jeff Si
Member since 2021 · 5 posts · 1 vote

I have a house in Kirkland, WA, and currently living there with my girlfriend. 

This is a 3 bedroom 2.5 bath SF house with a walk-out basement. My girlfriend and I are using the master bedroom and also the two other bedrooms as office since we are both working from home. The basement is empty. It's a pretty big, above ground, and has a door to the outside. Basically it can be treated an additional bedroom.

We are considering rending the basement out to make some cash flow, but so far we don't know what's the best way to invest it out. Here some the thoughts:

1. The ski season is coming. Seattle has one of the best snow in US so I'm thinking renting the basement out during the ski season. The caveat is Kirkland is relatively far from the ski resorts. Normally it takes about 1 hour drive to reach the nearest ski resort.

2. We are also thinking out listing the basement on Airbnb. But we never did airbnb before so not sure how much that would impact our life. We are very enjoying ourselves living in this cozy house. Sharing the house with a stranger is something we are hesitating about. 

would love to hear suggestions from you all about how to make the best use of the basement or even the guest bedrooms (My girlfriend and I can go to office even though we are not a big fan) to make some money. 

Thank you all!

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Most Popular Reply

Sherief Elbassuoni
Realtor · Bellevue, WA · Member since 2019 · 882 posts · 1k+ votes
3y

@Jeff Si, finishing the basement would be the way to go. Either do a one year lease or Airbnb will work out.

Renting it out only during the Ski season may not work out primarily because Kirkland is not so close to skiing activities

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  • Trish Mccoy
    Real Estate Agent · Grass Valley, CA · Member since 2017 · 185 posts · 198 votes
    4y

    Is there a bathroom in the basement?   How big is it?    If it were me, I'd try and make a separate unit out of it - separate from the main house.  Of course it would need a bathroom and maybe even a little kitchenette.  Also egress is important.  Not sure if there are windows already there.   That would give you tons of options.

    2Reply
  • Marshall Leipprandt
    Real Estate Agent · Miramar Beach, FL · Member since 2016 · 285 posts · 245 votes
    4y

    @Jeff Si Hey Jeff, does the basement have its own bathroom and kitchenette?

    If not, you would basically be having to share your house with any prospective guests on Airbnb or similar sites. I understand your hesitancy there. However, if there is the possibility to add a bathroom and kitchenette in the basement, you could almost create an entirely separate studio apartment that guests could check-in and check-out of on their own schedule using electronic keypad locks on doors. 

    Additionally, you can always control your schedule. For example, if you'll be out of town or have a big work project you're planning to complete in a particular week, you can block the dates off so that people cannot book them. You can also choose to only accept Airbnb guests who have been reviewed by other hosts to try and minimize any negative incidents or encounters with your guests.

    Start with doing a little research on Airbnb in your area for studio apartments or people renting by the bedroom. Get an idea of what other hosts are doing, what amenities they are providing, occupancy rates, and the average rental rates that they are charging guests. There's a lot to explore but take it little by little to see if it's something that would be feasible for your lifestyle and goals.

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    4y

    Hey @Jeff Si, I am also wondering about what is down there. If you have a bathroom (full or 3/4) you might make a go as a nightly stay place. Can you easily separate it from the main house? Does it have it's own entrance?

    0Reply
  • Michael Smythies
    Real Estate Broker · Seattle, WA · Member since 2022 · 62 posts · 68 votes
    4y

    Hi Jeff, 

    You're headed down the right path! House hacking is perhaps the most under appreciated real estate investing strategy out there but also can have the most impact on your financial life. 

    As housing is typically ones biggest expense, it is a huge help. Having said that, in a place like Kirkland, you'd have a very good chance of renting for a high amount as Kirkland is a desirable neighborhood to be in. 

    I would love to help you run the numbers to see which might be more profitable for you as I have quite a bit of experience in this area. 

    Feel free to reach out. 

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  • Ryan ThomsonBusiness Member
    Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
    4y

    I would make sure you have a bathroom down there. A kitchenette would be ideal but not necessary. Think of all the people that stay at a hotel witout a kitchenette. Then add a heavy door to separate your unit from them. If there is no kitchenette you'll have to put it on airbnb (not long term).

    There is so much automation with STRs now that it doesn't disrupt your life too much. Read "optimize your airbnb". Also find some good cleaners in the area that will take picture for you and tell you what you need to restock. 

    I bet there is a real estate meetup around you where you could easily meet people doing the same thing and learn a ton of local knowledge. 

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  • Michael HaasBusiness Member
    Real Estate Agent · Sammamish, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 725 posts · 3k+ votes
    4y

    Good call @Jeff Si! HouseHacking or renting out the basement is a great idea – it’s the number one way for newer investors to start building wealth in real estate.

    1. If you have a property with a second kitchen (ADU or MIL), be aware that 80% or more of those units have been built without permits. Not sure if your basement already has a kitchenette, but make sure you're aware of its permit status if it does.

    2. Brush up on building code requirements: in basements you're looking for egress windows that are 5.7 sq feet or more openable (3ft by 3ft casement style windows work best), and ceiling heights 6ft 8 inches or greater (as little as 6 ft 4 inches is ok under ductwork and beams though)

    Sounds like your basement would be a home-run to generate some extra rental income - Happy to talk through the details of that strategy with you, just shoot me a DM! Cheers,

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    5Reply
  • Jeff Si
    OP
    Member since 2021 · 5 posts · 1 vote
    4y

    Thank you all for your great suggestions! 

    To answer the question that was asked the most: my house is a 3-floor single family. all the bedrooms and bathrooms are on the top floor, living room the second floor, the basement and the laundry room on the ground floor. The problem with the basement is there is only a 0.5 bath (toilet, but no shower) next to the basement. For the guest to take a shower, they have to use the guest bathroom on the top floor. 

    any idea how to handle this other than adding another shower?...

    My girlfriend and I are actually seeking solutions to rent this basement out but not as a living space. I'm open to all suggestions. 

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    4y

    So @Jeff Si, if you add a shower to that bath, that will make it rentable nightly. Not having a kitchen isn't the biggest deal if people are out and about a lot.

    How much $$$ are you willing to put into it?

    What is the non-living space rental you are talking about? Commercial? Western WA and Kirkland is pretty  strict on zoning.

    0Reply
  • Trish Mccoy
    Real Estate Agent · Grass Valley, CA · Member since 2017 · 185 posts · 198 votes
    4y

    @Jeff Si    If you have laundry in basement and there's already 1/2 bath - you're almost there.   It would be easy to add a shower.   i think that is your best bet for the most money.     The other option in your could rent your basement out as a commercial space for someone needing office space.

    Honestly, unless you at least have a full bath - you're not going to have a very desirable STR

    0Reply
  • Jeff Si
    OP
    Member since 2021 · 5 posts · 1 vote
    4y
    Quote from @Trish Mccoy:

    @Jeff Si    If you have laundry in basement and there's already 1/2 bath - you're almost there.   It would be easy to add a shower.   i think that is your best bet for the most money.     The other option in your could rent your basement out as a commercial space for someone needing office space.

    Honestly, unless you at least have a full bath - you're not going to have a very desirable STR

    Thanks for the advice! Do you happen to know how much $$$ is needed to add a shower? 
    0Reply
  • Jeff Si
    OP
    Member since 2021 · 5 posts · 1 vote
    4y
    Quote from @Michael Baum:

    So @Jeff Si, if you add a shower to that bath, that will make it rentable nightly. Not having a kitchen isn't the biggest deal if people are out and about a lot.

    How much $$$ are you willing to put into it?

    What is the non-living space rental you are talking about? Commercial? Western WA and Kirkland is pretty  strict on zoning.

    I would not spend too much money in this before I'm sure I can make a profit. 

    May I ask what do you think of the rental market in Kirkland? I'm also think of renting the whole house out in about 6 months.
    0Reply
  • Trish Mccoy
    Real Estate Agent · Grass Valley, CA · Member since 2017 · 185 posts · 198 votes
    4y
    Quote from @Jeff Si:
    Quote from @Trish Mccoy:

    @Jeff Si    If you have laundry in basement and there's already 1/2 bath - you're almost there.   It would be easy to add a shower.   i think that is your best bet for the most money.     The other option in your could rent your basement out as a commercial space for someone needing office space.

    Honestly, unless you at least have a full bath - you're not going to have a very desirable STR

    Thanks for the advice! Do you happen to know how much $$$ is needed to add a shower? 

     Well it depends on the drain, how big, what kind of finish work you want etc...   You would have to get some quotes, but my guess would be $1500-6000, depending on the variables. 

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    4y

    @Jeff Si, well it will depend on where in Kirkland you are at, but the market should be great as a LTR. Any views of Lake Washington?

    Another thing to consider is you aren't that far from Microsoft in Redmond. If you do the bathroom and add a kitchenette of some kind you might be able to pull in traveling Microsoft people looking for a long stay. 

    1Reply
  • Josh GreenBusiness Member
    Realtor · Tampa/St Pete/Clearwater/Bradenton · Member since 2020 · 397 posts · 353 votes
    4y

    @Jeff Si

    To me, what it comes down to is your profitability to comfortability scale. Approach one and you distance from the other.

    I'm a big action taker. I believe taking action is a key indicator of an investors current and future success. Analysis paralysis is very real and when unchecked it keeps people from achieving so much more than they realize.

    What would I do? I would full send - find out what the laws are in your area. Find the data on occupancy and cost to furnish etc and make a plan. Have exit strategies which I'm sure you'll have (LTR, MTR, etc). I do this kind of consulting as a realtor here in the Tampa Bay area for my clients but can't speak on yours. I'd try to find a good realtor or investor (hopefully both) here on BP than can help answer these questions for your market.

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  • Sherief Elbassuoni
    Realtor · Bellevue, WA · Member since 2019 · 882 posts · 1k+ votes
    3y

    @Jeff Si, finishing the basement would be the way to go. Either do a one year lease or Airbnb will work out.

    Renting it out only during the Ski season may not work out primarily because Kirkland is not so close to skiing activities

    5Reply
  • James DainardPro Member
    Real Estate Broker · Bellevue, WA · Member since 2015 · 415 posts · 1k+ votes
    3y
    Quote from @Jeff Si:

    Thank you all for your great suggestions! 

    To answer the question that was asked the most: my house is a 3-floor single family. all the bedrooms and bathrooms are on the top floor, living room the second floor, the basement and the laundry room on the ground floor. The problem with the basement is there is only a 0.5 bath (toilet, but no shower) next to the basement. For the guest to take a shower, they have to use the guest bathroom on the top floor. 

    any idea how to handle this other than adding another shower?...

    My girlfriend and I are actually seeking solutions to rent this basement out but not as a living space. I'm open to all suggestions. 

    If there's exterior access you might consider putting a keypad lock on it and setting up storage stalls down there.
    You can market it to the crowd you were initially thinking of to store their ski equipment in the off-season.

    This is probably the cheapest reno you're going to get away with since you can just frame in what you need. I've seen some people do it with chain link but those don't do as well.
    The challenge with this is going to be the marketing, you're going to want to hit Fb marketplace and craigslist etc to get local people to rent the storage units once you've made them.

    Hope that helps!
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