Property Manager · Newport Beach, CA · Member since 2018 · 69 posts · 27 votes
I am looking into buying single family homes and came across a property that I would like to move forward with, but comes with a basement. Does anyone have thoughts on buying properties with basements? Are they more trouble than worth or can the numbers still work out? Is there a special insurance I can buy to cover in case of flooding that will cover damage?
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
7y
Basements are a pain but in my area they are so common that it would be rare to find a house without one . They flood , they stink they get mildew they are always cold . But renters love the extra storage space to hoard all their useless junk and bags of household garbage . If the unit has basement access then you can bump up the rent because it’s more space
Basements are very typical in the Midwest and in my area. You can add insurance to cover sump pump failure/seepage, etc. I like to finish the basements to give you more habitable space. It will be worth more money with a basement than without especially if it's finished.
I love basements especially if it can me made into a walk out. The house I like to buy is one with a basement with NO settling built into a hill. If it's unfinished, where I live, it's not considered taxable space. I don't care for basements with low ceilings though. If house is on a hill than I would not see why flooding would be an issue. You could check with your county to see where the water table may be. If the basement has a moldy musty smell, you may have issues fyi. Have a radon test done too. Also, make sure the rain water from the roof flows away from the house and does not pool near the wall.
Investor · San Diego, CA · Member since 2016 · 265 posts · 305 votes
7y
Basements are common in the Midwest and preferred by tenants for the extra storage space, cooler temps during the summer months and extra living space if partially finished.
Cast-in-place concrete basement walls are preferred over block walls. Slab on grade is preferred over crawl spaces. Make sure to always get a third party inspection!
I am looking into buying single family homes and came across a property that I would like to move forward with, but comes with a basement. Does anyone have thoughts on buying properties with basements? Are they more trouble than worth or can the numbers still work out? Is there a special insurance I can buy to cover in case of flooding that will cover damage?
Thank you!
It just depends on where you are looking. For example, in Cleveland, almost every house has a full basement. Sometimes finished, sometimes not. Either way, tenants expect them for some kind of use. Many like to use them for storage, others like to use them as extra living space. We do have houses out here without basements, but many times tenants seem disappointed when they find out.
I am looking into buying single family homes and came across a property that I would like to move forward with, but comes with a basement. Does anyone have thoughts on buying properties with basements? Are they more trouble than worth or can the numbers still work out? Is there a special insurance I can buy to cover in case of flooding that will cover damage?
Thank you!
Basements are the norm in many parts of the country. Shouldn't be a bid deal.
Adding to what Jonathan and others said, it doesn't have to be a walk out to be turned into a suite. If you have good ceiling heights, you might want to look into the option of creating a basement suite.
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y
@Codi Clausen if you’re looking to buy long distance (looks like you are) my advice is to pick a market without basements (like memphis typically).
Basements come with a lot of extra maintenance issues around foundations, mold/mildew etc.
I would not have this be the determining factor between picking one market over another but all else equal (between markets) where one typically has basements (most of the Midwest) and one that doesn’t (southeast usually) id go with the latter
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
7y
Basements are a pain but in my area they are so common that it would be rare to find a house without one . They flood , they stink they get mildew they are always cold . But renters love the extra storage space to hoard all their useless junk and bags of household garbage . If the unit has basement access then you can bump up the rent because it’s more space
Rental Property Investor · Richmond, VA · Member since 2016 · 279 posts · 133 votes
7y
@Codi Clausen
Other than the water issues that typically plague basements, you want to be cautious spending money to finish basements. I've heard there are rules that determine whether the finished area in a basement can be counted in with the total finished sq/ft. May be regional.
Flipper/Rehabber · Bronx, NY · Member since 2016 · 168 posts · 168 votes
7y
@Codi Clausen Basements with full potential or Finished basements have always been a great selling point for me and in the areas I look in. But, there are certain areas in NY since Sandy that did not and would never rebuild with basements. These specific areas if the home has a basement,most stay away from buying it, unless they are interested in a indoor underground (literally) pool when it rains. Anywhere in flooding areas with basements are an absolute turn off for buyers. But otherwise, I personally think basements are a selling point. Although, referring to the word “basement” could be very broad. They come in all different sizes and conditions. But if the basement space is ideal, then the sale will be also.
Flipper/Rehabber · Kansas City, MO · Member since 2018 · 20 posts · 4 votes
7y
@Codi Clausen I'm in KC and would highly recommend if you are buying it sight unseen to have a foundation inspection as part of your inspections. About 9 out of 10 homes we look at have or had foundation issues from minor cracks to substantial problems that can run thousands of dollars to fix. It's just the nature of the beast in the Midwest. People want them, but they can be a huge expense so better to protect yourself. I can give you the name of a guy many of us use in KC. Also, if you elect to finish a basement any finished living area below grade does not get the same value in an appraisal as above grade. Good luck! KC is awesome.
Rental Property Investor · Youngstown, OH · Member since 2018 · 6 posts · 8 votes
7y
@Codi Clausen be cautious. I don’t finish basements for livable space, especially anything that can be perceived as a bedroom. That would require a special easement and without you may absorb quite a bit of liability in the event a tenant or child cannot escape from the room. Unfinished, they’re all the same. Water issues here and there but nothing too complicated if gutters are clean and grade is correct. In Ohio my tenants expect a basement for laundry and storage.
Rental Property Investor · Lenexa, KS · Member since 2017 · 76 posts · 63 votes
7y
I live and invest in the KC market and prefer properties with basements. Foundation issues are a huge issue here due to hydrostatic pressure so you need to make sure proper drainage systems are in place (grading, gutters, etc).
We’ve had different experiences when it comes to crawl spaces then.
I've done flips with crawl spaces and actually own rental property in Indy with crawl spaces, full basements and slab on grade. The crawl spaces have created the highest repair expense during rehab than the others in my experiences. I don't buy off the MLS, and yes a third party inspector is used before closing the deal.
Crawl spaces are just a place for mold to grow on floor joists, whether it be from a leaky pipe, improper ventilation, poor drainage around the foundation or a combo of these things. This all just leads to a bigger issue later.
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
7y
Houses are worth less without them here, it is very uncommon to not have one, except for large apartments and commercial stuff.
The reason we have them here, is because the frost line is 4' (that means how deep does the ground freeze). Structural concrete must be poured below the frost line to keep from shifting during the freeze, and once you already have all the expensive equipment and labor out there to dig it out and build a wall 4', it doesn't cost that much more to just go full height and create some usable space. They make handy storm shelters, among other uses.
Basements are holes in the ground, and therefore are susceptible to flooding from rainwater from above and groundwater from underneath. This is the main reason finished living space in the basement usually does not pay - it is pretty much never worth what above-grade space is, the exception being a home built into a hill where the house is designed around the feature, and half the basement is exposed anyways.
While improper slope around the house can lead to water in the basement, the really expensive problems come from shifting, which almost always occur from the lack of appropriate back-fill, the presence of clay, and the fact that the clay absorbs the most water and therefore expands the most during the freeze. It's not so much the water sinking into the clay from above, it's the vacuum property of the clay, sucking up the groundwater from below during the freeze. Often a wall will buckle on the frost line. This is not cheap to fix, and often can be incurable in terms of getting your money back.
It wasn't until recently really, in the 90's around here, where code started to require the foundation back-fill be stone, which has zero absorption/expansion properties, and will actually shift with the surrounding clay during the freeze. Therefore, basement problems can occur in homes that are still quite "new", and frequently do.
Fixing a basement will cost anywhere between $55 to $250 per...linear foot! It is not uncommon to have a repair cost as much as a new one. Also, it might be hard to fix at all, if there is not enough access for the big equipment to get next to the house.
So, my two cents is never buy a house with a finished basement. You have no idea what is behind those walls and lets face it, plenty of people cover over these sorts of defects because it cost too damn much to fix them. Ugly but true.
I was burned two for two. If the basement is finished, as far as I'm concerned, the offering price is going to be $30k less.
If the basement is not finished, it is very easy to see if you have a problem or not before you purchase. An inspector can not see behind walls either. Different problems cost different amounts and not all imperfect basements are actually a problem. For instance, if you have a 50 year old house with a small amount of shifting, chances are it has shifted as much as it is going to shift. In fact, a perfect basement is rare. Water problems are the cheapest to fix, while structural the most expensive.
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
7y
@Codi Clausen The main concern with a basement is the potential for flooding. This can usually be easily mitigated though. 98% of water intrusion is due to improper drainage and soil grading. Just make sure you have functioning gutters and downspout with extensions away from the house. Also make sure the soil is graded away from the foundation. As long as you do that, you shouldn't have much problem. If you still ended up having flooding, you don't need a special policy. Most insurance policies will cover it but you will want to check yours.
Contractor · Cleveland, OH · Member since 2014 · 317 posts · 181 votes
7y
@Codi Clausen if you do a rehab with a basement it’s pretty standard to fill any exterior or glass block cracks, drylock the walls, and paint the floor grey.