Turn Your Basement Into an Apartment

Scott McGillivray was on Steven and Chris to tell us about how you can turn your basement apartment into a profitable rental property.

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These homeowners recently renovated their basement and regret not turning it into a rental apartment. Could they do it easily, and if so how?


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Scott recommended:

  • Adding storage to the bedroom.
  • Converting the laundry room into a kitchen because the plumbing is already there. To save space, get a combo heater/boiler and a stackable washer/dryer.
  • Kitchen cabinets that open upwards are great for low ceilings in basement conversions because you won't bang the cabinet door against walls. Open shelving is a good space saver too.
  • Warming up the space with paint colors and rug.
  • Adding a handle rail to the stairs (safety is important!)
  • Putting up a vanity mirror and some more lighting in the bathroom

Tips for Getting Started:

  • Is it legal? Make sure the by-laws in your area allow for a rental space.
  • Is there a separate entrance? It can cost about $10,000 to add one.
  • How high is the ceiling in the basement? If not high enough you'll have to lower the floor and this can be a big expense.

Pros, Pros and More Pros:

  • Having a rental unit works in any economy and every market. If you do it right, it is never a waste of money.
  • Having a rental suite is the biggest return on your real estate investment!
Other returns include:

Paint = 250% return!
Kitchens
Bathrooms
Flooring
Fixtures (door handles and light fixtures)

Do it Right!

  • Make sure everything you are doing is safe and legal.  People often take home renos to 90% but that's just not good enough when you have tenants in there.
  • Pay attention to good wiring and built-to-last, durable insulation. Remember, if things go wrong later, your tenant will call you and no one wants a tenant who calls every week with problems. You almost have to take more care than if it were you living there yourself or planning to sell.
  • Pay attention to doors - they should close properly and don't leave any electrics uncovered.
  • Make sure your investment will see a return in 2 yrs. Let's say you spent $24,000 on the renovations - If you charge $1000 in rent a month, you will pay it off in 2 years. This is what you should be aiming for.

D├ęcor Counts:

  • Your rental unit needs to LOOK like a million bucks but not cost it. It needs to appeal to the masses not just to you. Remember, you are not the one living there so no need to go big budget.
  • Make sure the color scheme is warm but neutral. 
  • Removable wallpaper is great idea so you can get it on and off easily.
  • Add your own window treatments before the tenant moves in. They might put holes in the frame when they install themselves, or even worse they might just put up a sheet!

Income Property airs in Canada on Mondays at 9 pm on HGTV Canada, Season 4 premieres on April 4th

Income Property airs in the U.S. on Wednesdays at11pm/10c, Season 4 premieres on April 6th




 

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