How to Rent Your Basement as an Apartment
Renting your basement as an apartment is a great way to turn unused or underutilized space into extra income for you, and can create a good quality, affordable housing opportunity for someone in your community!
A basement apartment also provides alternative money saving opportunities such as child care (an au pair suite), health care (a nurse's suite), elderly care (an in-law's apartment), etc.
There are some things to consider, though, before renting out your basement, so read on.
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Instructions
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Make sure you will have a tenant. Check in your local newspaper, at online sites like Craigslist.org, in apartment listings and anywhere else you can think of to see if other people are offering similar rentals. Check back in a week or two to see if any of those listings are still there. If no one is going to rent your apartment, it's not worth putting any more time or money into the space.
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Find out what is legal in your community by contacting your local city or county planning department. This is probably the hardest step in renting your basement as an apartment, but it's the most crucial. If you don't follow the law, you could face fines and penalties that negate the benefits of having a basement apartment. Before you rent it out, have the planning department inspect it.
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Make sure you follow the zoning requirements for your community. Do you have to have multiple parking spaces? What kind of doors can separate you from your tenant? What kind of fire and safety installations do you need? You most likely have to have a source of natural light and ventilation (a window that you can safely open) and an exterior fire exit.
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If you need to make renovations, decide how you will finance them and how much you are willing to put into the unit. Now that you know, from doing your research above, how much you may be able to get for a comparable unit you can figure out how much money you want to put into it and how long it will take to pay it off.
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Make the unit as attractive as you possibly can within your budget. If you wouldn't live there, it will be hard to market it to others.
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Set a price. If you have comparable units in your area, you should be in their price range, give or take a little based on amenities. If you don't have anything to compare to, you should discount it some compared to a regular apartment as most basement units don't command the same price. Make sure to factor in an increase in your utilities (and insurance) if you don't have separate meters installed for electric and water.
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Start advertising!Put your unit (with photos) up on Craigslist, your local newspaper's classifieds, your community building's bulletin boards, local cafes, etc. Talk it up!
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Notify your insurance company that you now have a multifamily dwelling. If something happens and you don't let them know, it can void your entire insurance policy. Better safe than sorry!
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Tips & Warnings
Make your unit something you would want to live in for the price you're requesting!
Add as much light as possible - that is the number one aesthetic selling point for basement units.
Always make sure to check out what's legal in your community.
Consider safety concerns, even if they aren't listed in your local laws.
