Homeowners have numerous reasons to convert a basement into an apartment: A returning college grad might need a rent-free place to live while accumulating savings; they may need a place to house an au pair for their young children, have an aging parent or grandparent who doesn't want to live alone, or want income by renting otherwise unused space.
"If the home is near a college, there could be high demand for a renter who doesn't want to live in a dorm," says Neil Salvage, general manager of Lending Tree Home Pros, which connects contractors and homeowners.
Kathryn and Steven Van Asselt found yet another reason after they purchased a house in Portland, OR, two years ago with a 700-square-foot basement. They knew the location would appeal to those moving into the area and not wanting to reside temporarily in a hotel.
With Steven's expertise as a general contractor and owner of Van Asselt Construction, they also knew they could make improvements affordably, and their prior experience as landlords gave them a leg-up on what renters seek and how the process works. They first checked city regulations to be sure they could have someone live fulltime within their premises and pay rent, install a working kitchen, meet criteria for minimum ceiling height (at least 6'8"), and have the right number of egresses for safe exit.
Next, they had the space inspected to be certain it was dry—and would remain so. Then, they were ready to make changes—provide a private access to the street so their tenants wouldn't have to enter and exit their home, break through concrete walls to enlarge windows to add light to the bedroom and living walls, add insulation for warmth and sound dampening to cut noise to their upstairs level, install a full kitchen and bathroom, and paint walls.
Furnishing the apartment became the fun part of the process, but they kept costs down by purchasing mostly at IKEA. "We knew that people like IKEA because it's modern and cheerful," says Kathryn, a professor at Portland State University. She also knew to add in nice perks—good coffee maker, HD flat-screen TV, towels, real closet space, laundry equipment, and stack of maps and brochures about Portland. They estimate total costs at between $15,000 and $20,000, and have been able to find renters through Craigslist who pay $400 a week, with one-month minimum stay.
Here's what else the couple and others suggest:
Don't let your downstairs become a black hole. Learn what you need to brighten up your basement.
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