More homeowners are looking for new ways to create income and opt to rent their house’s basement space. After all, renting your basement is easier than ever. Not to mention, most people don’t fully use their basements, making them the ideal spare room to rent for additional income.
No matter why you choose to take this road, there are a few important aspects in the process that you need to know and that you should be very careful with.
How to find out if it’s legal to rent out your basement
While you might have a basement at your home, not all counties allow for basement rentals.
For example, you need to check your local laws and find out if it’s legal for you to rent out the basement of your house — research for conditions, regulations, or permits in your area. If you need to comply with safety or health codes, you need to find as much information about it as possible.
You may also need to obtain tax permissions. Check with your homeowners association (if you are part of one), your state’s landlord-renters conditions, and other local permits. Depending on your city’s laws regarding rental property, you’ll have different options to rent out extra space in your house.
If the answer is yes, you can rent a basement, try to talk with an insurance agency, and find out if you need any additional coverage for your property. An insurance agent can help you with recommendations on what to do if there is property damage, how to set a fee for your renter, or what fees to charge.
Pros and cons of renting a basement apartment
You may be questioning whether or not you should be renting your basement apartment, so here are some benefits and some risks to keep in mind.
Pros
- The most obvious benefit is the extra income you will have coming in from renting your basement. You will need to prepare your unit for renters, but you will cover that expense in a few months. If you have a mortgage on your house, having an additional source of income will help you pay it off in a shorter time.
- Every homeowner knows that keeping your dream house tidy is a thorough job. More money coming into your pocket will help you cover any renovations, maintenance, or upgrading costs you wish to do to your property. Additionally, improving your common areas will most likely attract more potential renters to your basement.
- If you are not often around your house, knowing someone else is there will give you a fresh new sense of security that someone responsible would take care of your house in case of an emergency. This is another reason why choosing a trustful renter is important for your well-being as a landlord.
- Another benefit is that even when you’re away, your house will never be empty.
Cons
- If you do not carefully screen your renter, you run the safety risks and concerns that you can avoid by asking previous landlords for references or running background checks. It’s vital to know the person or persons you will be sharing your home with in the near future.
- Also, getting to know your renter will help you avoid any possible uncomfortable situations at home. After all, this is a perfect stranger that will be sharing the same space as you. If you don’t want to go through this painful process, it is best to get to know them.
- Another potential risk of choosing the wrong renter or offering your basement apartment for rent is worrying about theft or property damage, whether intentional or not. If your renter is not careful, they can leave your doors open and leave your house exposed to robbers. Check for references beforehand.
- Your renter or renters may have family or friends they would like to have over often, so check with them first and avoid unwanted or uncomfortable guests around your house.
Before renting your basement
If you decide to rent out your basement, there are steps and considerations you have to take before and after you list your basement.
Prepare the room
More than ever, users respond more to pictures than words. Deep clean your basement, make necessary repairs, and make sure you take the right pictures to highlight the most attractive aspects of your unit.
Have the basement fumigated
If you haven’t used your basement in a while, try to fumigate and avoid any potential trouble with bugs, insects, or even debris.
Determine how much to charge for rent
After reviewing all the amenities you can offer, look for similar basements available near your area and analyze how much they charge, if they have a flat fee for utilities, what conditions they provide to renters, and set a fair price for the space you are offering.
Prepare a rental application
As a potential landlord/roommate, you will want to comply with landlord laws and expect to understand if your renter will be reliable for you. Therefore, prepare a rental application that lets you learn about their rental history, which can let applicants explain discrepancies and allows them to know if they can afford the place. In general, it assures you that they will be able to meet your minimum requirements.
Run a background check
Interview potential renters, ask their previous landlords about their experience, and gather as much information as possible. Avoid having a bad experience with them yourself. Stipulate in your agreement all your boundaries related to neighbor noise, pets allowed, smoking habits, and more.
Finally, make sure you manage your rental listing with the right company. Keep in mind that including high-quality photos and standout details of your apartment will spark more interest from potential renters.
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