How often do you use your basement? Once a week? Once a month? If you can’t remember the last time you used your basement for anything except storage you might want to consider the potential of turning your space into extra income. Basement suites are surging in popularity and offer homeowners the financial flexibility to pay off their mortgages sooner, save for the future or even travel more often.
From offering your space for longer term 12-month leases or even exploring the potential of turning your basement into an Airbnb rental there are plenty of attainable options out there. “The biggest thing is making all of the available space in your home usable,” says Realtor Kerri-lyn Holland. “Whether that’s turning your basement into more living space for your family, or converting essentially a giant storage area into an investment.”
Here’s our guide to the different rental options, a few words of caution and tips for turning any basement into the perfect investment suite.
Kerri-lyn and Jason Holland’s Airbnb suite
Short Term Basement Suite Rentals
Gaining major traction in only the last five years Airbnb is becoming an extremely popular rental option for homeowners and travellers alike. Airbnbs offer guests the option to stay in a comfortable, more home-like environment and for owners it opens up a giant potential income stream, especially for well appointed properties in centralized areas of the city. “Short term rentals do mean more management but there is the potential to make greater profit than with a long-term renter,” says Jason Holland. “Choosing higher end furnishings can even increase profit anywhere from 30-40%.”
Not only can a short term rental increase your potential profits, you can also avoid circumstances that make a long term lease less favourable. According to the Hollands, investment clients will sometimes sell just to avoid the hassles of traditional renters. “When you have a long-term tenant you are entering into a drawn out relationship with someone after only an interview and a credit check,” says Kerri-lyn Holland. “With an Airbnb the tenant is only with you a few days and then you’re welcoming someone new.
The more preparation you put into it, and the more pride you have for your space will translate into the respect a guest is going to show back to your property. “Creating strict rules limiting smoking, parties, and staying on top of communication will help the process go smoothly,” says Jason Holland. “If you put a little more money into it you’re more likely to get better results.” Taking extra security precautions are also important. The Holland’s recommend exterior doorbells with motion sensors so you can monitor how much activity is going on at the entrance of your property.
Long Term Basement Suite Rentals
If your property is in a less centralized area or doesn’t fit the bill for short term rental, long term basement suite rental is also a viable option and comes with it’s own set of positives. With less turnover, fewer management needs and a more consistent income stream long term leases are also a great investment. “Both options can be supplemental to your income, especially in the current economic climate we’re living in right now,” says Kerri-lyn Holland. “The nice thing is you can do it for as long as you can and then the option is always there to convert the basement back into your own livable space.”
“Renting out your basement is very attainable for property owners,” says Kerri-lyn Holland. “Depending on your comfort level you can find a rental option that works for you.”
Purchasing Property with a Purpose
If you’re on the market for a property with basement suite potential the most important first step to take is hiring an experienced realtor. They will be able to guide you on what to look for in a potential property whether that’s a separate entrance, a centralized location or even access to transit. “It’s a big move and you’ll want to seek professional advice from someone who can look for all of those things in a potential property before you even walk in the door for a viewing,” says Kerri-lyn Holland.
“Another thing to look out for in a basement before you buy is plumbing, even if it’s just roughed in this will save you a substantial amount of money when you get to the renovation step,” says Jason Holland. Engaging with a mortgage specialist will also help ensure you can qualify for the type of investment property you’re looking for.
Creating a Legal Basement Suite in Your Home
To transform your basement into a rental suite that investment dreams are made of there are a few steps to be aware of before you dive in. Setting aside a healthy budget with added contingency is essential to get started. “Depending on the square footage of the basement and the material selection, cost variation for a renovation would typically fall between $25,000 - $50,000,” says Mario Laflamme of Mario Laflamme Contracting Renovation.
When looking for a contractor Laflamme recommends starting with a few key pieces. “Ask a potential contractor for proof of their contractor license, liability insurance, WCB coverage, and references first,” says Laflamme. “ Interview 2 or 3 contractors and compare their responses, if a contractor says he can start the next day this can be a big red flag and indicates he doesn’t have any other ongoing work.” Once you know the contractor checks out and you feel comfortable having them working on your home, you can begin to discuss budget, timeline and goals. Carefully considering finishes is also important “Products like scratch resistant luxury vinyl plank, or higher end more durable plumbing fixtures will help ensure you’ll have less maintenance in the future,” says Laflamme.
Ensuring bedroom windows are large enough to qualify the space as a legal basement suite is also an important point to remember. Creating a legal suite will secure your investment and ensure you’re not opening yourself up for a potential lawsuit. “Even if the existing windows are too small, they can be upgraded for about $2,500 per window and this will increase property value substantially,” says Jason Holland.
By carefully considering the different rental options available and choosing an investment that works best for you, you’ll be well on your way to suite satisfaction.
“The suite is so nice! Super cozy and very stylish. My family loved how it was like a modern apartment style. Would definitely recommend anyone to stay there. I will definitely try them again when I visit.” - Dennis, Airbnb guest. To book your stay click here.Posted by Kerri-lyn Holland on