All Forum Posts by: Temu Chechu

   My friend owns a duplex near the University of Minnesota that he rents to students.  The duplex is a 3 bedroom second floor unit, and a 2 bedroom main floor unit.  It also has an unfinished basement that currently has 2 washers, 2 dryers and also has the 2 boilers and 2 waters heaters.  I tell him he should put a washer/dryer in each unit,  and turn the basement into a separate one bedroom apartment, maybe 600 square feet of living space  

  I am trying to figure out what the correct formula would be.  If it was going to cost 30k for the renovation but you can assume a constant income of say 1k a month in todays dollars.  How would that compare to investing that same 30k in the stock market?  or how should I think about it?  It's not like he will have to pay any more money for a mortgage because he already owns the property he is just not using the basement as an additional income source.  I know how to use the compound interest calculator to see what happens at 7 percent for the stock market but I'm confused how the rental income works because he could just invest that additional 1k a month into the stock market too?  Let me know.  Thanks