If you don’t use or even think of your basement apartment or mother-in-law suite, you may be missing out on a great and popular way to make (mostly) passive income by renting it out, creating a quiet workspace or office or even carving out some space to finally get the ball rolling on that start-up idea you’ve been kicking around for the last few years.
What is a basement apartment?
A basement apartment is characterized by a few distinct features. It is always a part of a larger house and is almost always below ground level. It usually will have a separate entrance and can be registered as a separate dwelling unit.
Registering it in that manner is not only the law, but it allows a prospective tenant’s name to be on the utilities instead of your own (should you wish).
How can I turn my basement into a livable apartment?
For starters, you need to ensure that your basement is up to code. If you’re unsure whether or not your unit was previously renovated with a permit (which ensures that your basement-dwelling area meets the standards for renting), the first step is to contact your municipality to inquire. They’ll perform an inspection and either register the unit, give you the go-ahead to list your basement for rent or present you with what you need to have done to ensure your unit is safe.
Consider other factors as well, such as insulation. If you’re concerned about privacy (as well as temperature levels), be sure there is enough carpeting and wall insulation to keep out the conversation — and the cold.
Be sure that your carpeting, plumbing, appliances, and fixtures are well maintained and in good working order. Consider repainting to a light, airy colour to open the space up and make it more inviting!
Keep in mind that renters that are after a basement-dwelling typically are students, bachelors or individuals who work quite a bit. They will firstly look for rentals that have utilities included. You’ll have to decide if you want to take on the risk of renting to a tenant who views it as a ‘free-for-all.’
On the other side of the coin, you may lose out on a great tenant simply because they didn’t have the time, desire, or lifestyle (ie, student) to set up utilities on their own.
Different uses for basement apartments:
Aside from using a basement suite as a great way to offset your mortgage or bills, there are plenty of other uses for your extra space!
Renting to a business instead of an individual tenant
Using the space as a personal retreat to work on hobbies or catch your breath after watching your children and catch up on TV time.
Having a quiet, separate spot to freelance, or work to develop your side hustle/business! Both are great sources of secondary income.
A quick note:
If you’re ready to take on the responsibility of being a landlord, it’s good practice to consistently set some of your rental income aside for property taxes, as well as for an emergency fund in case your tenants run into issues (such as burst pipes or a broken appliance).
Be sure to thoroughly vet prospective tenants, have them sign a proper lease, and make sure that the rent amount is reasonable for you and a reasonable comparison to the going market rates.
Get in touch!
With all of this in mind, you’re likely more than ready to move forward with your plans to revamp your basement apartment, find a good tenant and start making some passive income!
That’s where we come in. Get in touch with us at BCR Basements by using our user-friendly contact form or by giving us a call at (647) 774 4589.