If you are looking to make a little extra money, it may be a good idea to convert your basement into a rental suite. As you already live in the home, it won’t be too difficult to handle maintenance requests regardless of when they come in. What are some steps that you might need to take before renting your basement or even another space in your home?
Is Your Home in Good Condition?
The first thing that you need to consider is whether your home is suitable for a tenant to live in. It may be necessary to add an egress such as a door or a window that an individual could crawl out of in the event of a fire or other emergency situation. You should also ensure that there aren’t any pests, air quality, or other concerns that could put a tenant’s health or safety at risk.
What Are Other Landlords in Your Area Charging?
You want to be sure that your rental rate is in line with what others in the area are charging their tenants. It may be possible to charge more if you’re offering more space or offer easier access to a major highway. Tenants may also be willing to pay more if the space is furnished or if you agree to take care of utilities and other expenses on their behalf.
Will You Manage the Property Yourself?
Assuming that you live in the home where the basement rental is located, you can likely handle maintenance and other tenant issues yourself. However, you can choose to delegate the task of being a landlord to a property management company. Property management companies will screen tenants, handle maintenance requests and collect rent checks on your behalf.
Who Would Make a Good Tenant?
It is important to know who would be willing to live in your basement rental property. Ideally, you want someone who is relatively clean, quiet and pays their rent on time. However, if you live in a college town or in a rural area, it may be necessary to rent to college students or otherwise be more flexible when searching for a tenant. It is important to note that state and federal law prohibits you from rejecting an application simply because of an applicant’s race, national origin or family status.
Renting a portion of your property can be a great way to reduce a mortgage payment or otherwise strengthen your financial situation. Regardless of why you choose to become a landlord, be sure to track your income and expenses for tax purposes.