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As part of this investment property information series, investors should understand the relatively inexpensive way to add value to an investment property, as well as throw off more rental income, by transforming an existing unfinished basement space into habitable space. Since you’re utilizing already existing space within the footprint of your building, the incremental cost to upgrade your property is substantially less than if you were to create an addition by adding an extension or entirely new level to your property.
The most important features
Basement apartments can be very attractive to prospective tenants as long as they feature several key components. First, there should be ample natural light in the unit. While basements typically are partially below ground, smaller windows are the norm. However, more light can be added by adding more windows to the unit.
You must conform to building codes
Secondly, you’ll need to make sure the basement conforms to your local building code. Your contractor or architect will advise you as to the necessary solutions to issues like emergency exits. As part and parcel of this, you can usually add an emergency exit by creating a large window exit, solving two problems at the same time.
Proper headroom is also a common problem that most basements lack. Your contractor or architect will also advise you whether your state will allow exemptions if you don’t meet the headroom requirements. (Building codes have headroom requirements not for the tenants’ sake, but rather for firemen. In case of fire, firemen with their helmets on battling a blaze in the dark need to be protected first and foremost from very low ceiling heights. It’s not something the average person thinks about – but makes a lot of basic common sense.)
Basement water problems
Third, you’ll need to make sure there are no water issues in your basement. Most basements have some sort of water problem, but there’s always a solution, depending on the type of problem. Dampness alone can be mostly ventilation-related. However, actual standing water is usually a sign of either poor landscaping around the perimeter of the house and the resulting water seepage through foundation wall cracks, or a high water table and/or hydrostatic water pressure, where water begins to seep through the basement flooring, and not through the foundation walls.
Water problem solutions
All these types of basement water problems come with relatively easy solutions. Ventilation problems can usually be addressed by adding more windows and/or room ceiling fans to create better air flow. Standing water can be dealt with through the addition of French drains. They function as an interior gutter system installed in the perimeter flooring of the basement. Water coming in from foundation walls is then collected in flexible piping. The water flows by gravity to the lowest perimeter point, where a sump pump is fitted into a permanently constructed sump pit. Water is then discharged automatically far away from the house.
Simple landscaping can also help prevent water seepage problems. This may involve building up berms around the sides of the house to ensure water rolls away from the building. However, sometimes a larger scale landscaping project is required to place waterproof barriers around the perimeter foundation walls.
Keep the rehab simple
Probably the single biggest rule in this investment property information series, is to keep things as simple as possible. Once the basement is water-proofed, a licensed electrician and plumber will be required when adding lighting, adding a kitchen and a bath, and ensuring that the new rental unit meets all building codes in your area. However, always remember to keep it simple when undergoing the cosmetic renovations. Keep the rehab on the bland side – nothing flashy, and make sure it appeals to most everyone, and that there’s nothing objectionable about the renovation. In this way you’ll appeal to the largest pool of tenants.
Once completed, you will have added value to your building by increasing the habitable square footage of the property, while at the same time increasing your rent roll on it as well.
photos courtesy of southeastmichiganhomeimprovementremodel.com,
roomadditions.us, nickgoodman.com, quality1stbasementsystems.com,