Landlords Earn More Rent – Convert the Basement
The more units that you can rent out, the greater your income. Landlords, if you want to earn more rent then maximize the space you own – convert the basement. This can be an option if you own a rental that has an unfinished basement. Additionally, if your own personal home has an unfinished basement that you are not using to the full, it can generate extra cash to help pay down the mortgage.
Before You Convert the Basement, Check Your Zoning
Not all zoning districts will allow you to have two or more units per parcel. Your first step will be to determine the zoning of the property and if it will allow you to convert the basement for multi-family use. For example, the Raleigh Zoning Code allows limited two-unit use in zones R-2 and R-4 and it is permitted in zones R-6, R-10 and many of the mixed use zones. The Wilmington Zoning Code allows an Accessory Apartment under all residential zones.
In addition to zoning, consider where you are in relationship to the nearest flood zone. You do not want to spend the money to create a lovely basement rental unit, get a tenant and then pass out life vests after the first heavy rain. If the basement is damp, requires a sump pump or has flooded in the past, perhaps an attic conversion would be more practical (we’ll address that in another article).
Follow the Building Code While You Plan Your Basement Conversion
Each municipality will have building codes which determine how to qualify your basement as a habitable and rentable unit. Generally speaking, there must be at least two ways to enter or exit the unit. This can be through an exterior door or an ingress/egress window. Speaking of windows, most building codes require that the windows of a habitable unit be at least 6 square feet. This will help make your basement unit feel more like an apartment and less like a dungeon.
You will also need to consider electrical plug/outlet requirements and the installation of smoke detectors. Creating a kitchen and bathroom below grade will often require professional installation to eliminate backflow problems. Do not forget that you will need to pull permits for the conversion.
Plan Your Basement Conversion to Maximize the Rent
If you are going to go through the expense and effort of converting your basement, make sure that you design it to function well. Removing some of the exterior grade, if possible, to create an exterior entry will improve the market appeal. If that is not realistic, create a first floor common area entrance to ensure safety and privacy.
Design the area to have an open feel and maximize the light. Consider installing tubular skylights in rooms that lack windows. Include proper ventilation in high humidity areas such as in the kitchen and bathrooms. If you want to maximize the rent in your basement apartment, do not skimp on the kitchen. Add some high-end touches to create market appeal. The same can be said for the bathroom.
If you want to increase your cash flow, converting the basement into an basement apartment can be a relatively easy way to do it. With some careful planning and thoughtful design features, this forgotten area can be turned into a money making rental unit.