Renting out apartment in basement

hoffse · January 2015

So I mentioned in a previous post that we are about to have some plumbing fixed in our basement. It looks like this is going to involve tearing out some sheetrock and possibly a wall in the basement bathroom that's tiled and has the vanity/sink attached to it. The wall tile in the bathroom is a horrible dark orangey-brown color, and the vanity is falling apart. I won't be sad to see it go.

Obviously if it's torn out, it needs to be fixed, and I have no intention of reinstalling that ugly tile again. So we will view this as an opportunity to make the bathroom more inviting. We wouldn't move the plumbing or anything, just replace the vanity and lighting (the shower is fine and the toilet is new) and re-tile with something that's not an orangey-brown.

H and I have started to talk about renting that space out if/when we get it fixed up. It's a daylight basement that has a bedroom with walk-in closet, living room, full bathroom, kitchenette, and even its own driveway with exterior entrance and small patio. The kitchenette has a few cabinets with a sink, a full stove/oven combo, and space for a small fridge. There is no dishwasher.

The ceilings in the basement are pretty low (7 ft), but they are sheetrocked with canned lights throughout. The whole space needs to be repainted a lighter color, but the layout is great and the tile is in good shape. It's half-furnished right now.

If we do this, we might start with summer associates who come work for our law firms for 6-12 weeks in the summer. Many of them need to find short-term housing, and we know they would be on their best behavior. I'm just not sure if it's weird for us to collect rent from them, since they are students and we are not...? ideally, we would rent it out to a well-behaved, QUIET student (no parties, no raves), with the understanding that when our city is under a tornado warning, we are allowed access to the space to take cover. That's the entire reason we insisted on buying a house with a basement in the first place. Anyway that's why the summer associate thing is appealing - it's short term, it's outside of tornado season, and they will be well-behaved. An international student might also be appealing, though it would be longer term.

What do you think? Worth pursuing? We estimate that we can DIY a rehab of the basement living space, bathroom, and spruce up the kitchenette/buy a small fridge/freezer for less than $2,000. It's mostly fine as-is, it just needs some cosmetic TLC in places.

What would MM do?

Xstatic3333 · January 2015

That definitely seems worth pursuing to me if you wouldn't mind sharing your space and dealing with the usual landlord headaches. That's a great benefit to have in your home. A summer associate seems like a good way to go; I'd just check with your bosses first and make sure it's not considered a conflict of interest or anything like that. Then if that goes well, you could get a longer term international student or even put the space on Air BnB. You also might want to spend some time making sure the basement is up to code in your city, but that should be easy peasy for a couple of attorneys

formerlyGDaisy09 · January 2015

We often host temporary roommates. We live near an academic medical center that has medical students, mid-level care students, and traveling nurses that come to the area seeking short term housing. That kind of situation helps us build our savings, but is nothing we depend on long term, so I can't speak to the ease of lining that type of situation up. since we just have a bedroom, bathroom, and shared kitchen to offer, and those visiting professionals are generally on a tight budget we ask for rent that is fairly low for our area.

We will also donate the use of our space to local NFP arts organizations that need short term housing (usually 1 week to a month or two) for visiting artists.

we find that those kind of situations where we know we're getting a professional who is here for a job are the best as far as sharing our home with people goes. It also allows us to pick and choose when during the year we're hosting visitors and when we'd rather have our privacy.

brij2006 · January 2015

Do it! Heck, even with its own entrance and driveway, that makes it even more ideal. I would definitely check with your bosses as far as having the summer associate live there, but it's definitely worth looking into.

FWIW I actually lived in the basement of a Korean family's home for my last 5 months of college. It worked out perfectly, because I was in Chicago where you had to sign a 1 year lease or pay an exorbitant amount in rent for a shorter one. The family had access to the basement, because they had a storage room down there. I also had to walk through their laundry room and kitchen in order to get to the basement door. So it was not separated at all. They had 2 very young children at the time, and 1 on the way. I am forever grateful for how they made me feel comfortable and at home there, even though I did walk through their home multiple times a day.

hoffse · January 2015

Xstatic3333 said:

That definitely seems worth pursuing to me if you wouldn't mind sharing your space and dealing with the usual landlord headaches. That's a great benefit to have in your home. A summer associate seems like a good way to go; I'd just check with your bosses first and make sure it's not considered a conflict of interest or anything like that. Then if that goes well, you could get a longer term international student or even put the space on Air BnB. You also might want to spend some time making sure the basement is up to code in your city, but that should be easy peasy for a couple of attorneys

Thanks, all good thoughts. We aren't crazy about the idea of sharing our space, but it was obviously built as an inlaw/rental suite, and we simply aren't using it (yet). It's not super inviting right now, and we want to make it nicer. That's especially true if this plumbing issue results in the sheetrock being torn out anyway. Might as well fix the holes in the wall in a way that looks nice, right?

But it's also hard to stomach spending any money on the basement when we know it probably won't add much value to our house. Finishing the basement in the first place is where you add value, not making it look nicer.

That's why we were thinking short-term rentals: it wouldn't take long for the rental income to pay for the updates down there, and we will end up with a nice space that's comfortable to use in the future. If/when we have kids that might also become the guest area. We have a third bedroom upstairs, but it's very small, and we currently use it as our office. We actually use the office a lot, and we would hate to give up that space for guests that only come every two or three months.

I know summer associates often stay with lawyers. I'm just not sure if they pay rent or not - our HR person would know. They try to get them to stay with the younger attorneys to make it more fun for them/less awkward. I have no doubt we would get a summer associate to live with us, I just don't know if we can collect rent...

At the end of the day we will probably make these updates anyway just to make the space more inviting. But it sure would be nice if we could get it to pay for itself....

hoffse · January 2015

Gdaisy09 said:

We often host temporary roommates. We live near an academic medical center that has medical students, mid-level care students, and traveling nurses that come to the area seeking short term housing. That kind of situation helps us build our savings, but is nothing we depend on long term, so I can't speak to the ease of lining that type of situation up. since we just have a bedroom, bathroom, and shared kitchen to offer, and those visiting professionals are generally on a tight budget we ask for rent that is fairly low for our area.

We will also donate the use of our space to local NFP arts organizations that need short term housing (usually 1 week to a month or two) for visiting artists.

we find that those kind of situations where we know we're getting a professional who is here for a job are the best as far as sharing our home with people goes. It also allows us to pick and choose when during the year we're hosting visitors and when we'd rather have our privacy.

Now this is an interesting idea. We have three major hospitals within a 10-min drive of our house. It didn't even occur to me that we could tap into that group for renters. I guess there are lots of doctors/nurses/etc. who need 4-12 week housing? We really don't want to host somebody super long-term, but it sure would be nice to get enough to pay for these updates (plus maybe a few more around the house).

CuriousKiddosMama · January 2015

Do it!!!! I've rented a room before and it was an awesome way to make some extra cash. The frost time I did was to an insurance adjuster who was in town for hurricane damage. He stayed 3 days and the. Was gone. I actually offered to give him his $ back but he told me it was cheaper and more pleasant than staying in a hotel.
The second one was a friend and she paid half my mortgage so I could pay cash for grad school. Just be sure to carefully screen whoever you let in, and the apartment should pay for itself quickly.

hoffse · January 2015

Ok, this is making me feel like we need to investigate this option more seriously!

We really aren't on a timeline for this. We don't want to race to get the basement put back together. But this plumbing issue is something that MUST be taken care of, and at that point we will probably start to cash-flow the sprucing up of that space. It will certainly be done before the end of the year, barring some catastrophe.

formerlyGDaisy09 · January 2015

hoffse said:

Gdaisy09 said:

We often host temporary roommates. We live near an academic medical center that has medical students, mid-level care students, and traveling nurses that come to the area seeking short term housing. That kind of situation helps us build our savings, but is nothing we depend on long term, so I can't speak to the ease of lining that type of situation up. since we just have a bedroom, bathroom, and shared kitchen to offer, and those visiting professionals are generally on a tight budget we ask for rent that is fairly low for our area.

We will also donate the use of our space to local NFP arts organizations that need short term housing (usually 1 week to a month or two) for visiting artists.

we find that those kind of situations where we know we're getting a professional who is here for a job are the best as far as sharing our home with people goes. It also allows us to pick and choose when during the year we're hosting visitors and when we'd rather have our privacy.

Now this is an interesting idea. We have three major hospitals within a 10-min drive of our house. It didn't even occur to me that we could tap into that group for renters. I guess there are lots of doctors/nurses/etc. who need 4-12 week housing? We really don't want to host somebody super long-term, but it sure would be nice to get enough to pay for these updates (plus maybe a few more around the house).

yes! We've had a PA student with us for 5 weeks, a traveling nurse with us for 12 weeks, and my good friend stayed for 6 weeks while she was a medical student (we didn't ask her to pay us anything, but she did give us something to cover the utilities she used). all those stays were in 2014...what I'm a little confused about is what, if anything, I put on our taxes. we also hosted guest artists for about 4 weeks for free.

hoffse · January 2015

Gdaisy09 said:

hoffse said:

Gdaisy09 said:

We often host temporary roommates. We live near an academic medical center that has medical students, mid-level care students, and traveling nurses that come to the area seeking short term housing. That kind of situation helps us build our savings, but is nothing we depend on long term, so I can't speak to the ease of lining that type of situation up. since we just have a bedroom, bathroom, and shared kitchen to offer, and those visiting professionals are generally on a tight budget we ask for rent that is fairly low for our area.

We will also donate the use of our space to local NFP arts organizations that need short term housing (usually 1 week to a month or two) for visiting artists.

we find that those kind of situations where we know we're getting a professional who is here for a job are the best as far as sharing our home with people goes. It also allows us to pick and choose when during the year we're hosting visitors and when we'd rather have our privacy.

Now this is an interesting idea. We have three major hospitals within a 10-min drive of our house. It didn't even occur to me that we could tap into that group for renters. I guess there are lots of doctors/nurses/etc. who need 4-12 week housing? We really don't want to host somebody super long-term, but it sure would be nice to get enough to pay for these updates (plus maybe a few more around the house).

yes! We've had a PA student with us for 5 weeks, a traveling nurse with us for 12 weeks, and my good friend stayed for 6 weeks while she was a medical student (we didn't ask her to pay us anything, but she did give us something to cover the utilities she used). all those stays were in 2014...what I'm a little confused about is what, if anything, I put on our taxes. we also hosted guest artists for about 4 weeks for free.

My gut instinct says that it all goes on your taxes... but I would have to look that up to know for sure. Not legal advice, obv.

How do you find these people? General friends/contact? Do you list on AirBnB or VRBO?

smerka · January 2015

Look into the income tax consequences too. If you live in a HOA, they might have rules too.

formerlyGDaisy09 · January 2015

hoffse said:

Gdaisy09 said:

hoffse said:

Gdaisy09 said:

We often host temporary roommates. We live near an academic medical center that has medical students, mid-level care students, and traveling nurses that come to the area seeking short term housing. That kind of situation helps us build our savings, but is nothing we depend on long term, so I can't speak to the ease of lining that type of situation up. since we just have a bedroom, bathroom, and shared kitchen to offer, and those visiting professionals are generally on a tight budget we ask for rent that is fairly low for our area.

We will also donate the use of our space to local NFP arts organizations that need short term housing (usually 1 week to a month or two) for visiting artists.

we find that those kind of situations where we know we're getting a professional who is here for a job are the best as far as sharing our home with people goes. It also allows us to pick and choose when during the year we're hosting visitors and when we'd rather have our privacy.

Now this is an interesting idea. We have three major hospitals within a 10-min drive of our house. It didn't even occur to me that we could tap into that group for renters. I guess there are lots of doctors/nurses/etc. who need 4-12 week housing? We really don't want to host somebody super long-term, but it sure would be nice to get enough to pay for these updates (plus maybe a few more around the house).

yes! We've had a PA student with us for 5 weeks, a traveling nurse with us for 12 weeks, and my good friend stayed for 6 weeks while she was a medical student (we didn't ask her to pay us anything, but she did give us something to cover the utilities she used). all those stays were in 2014...what I'm a little confused about is what, if anything, I put on our taxes. we also hosted guest artists for about 4 weeks for free.

My gut instinct says that it all goes on your taxes... but I would have to look that up to know for sure. Not legal advice, obv.

How do you find these people? General friends/contact? Do you list on AirBnB or VRBO?

That's what I figured, we hire someone to help us with our taxes, I'll be sure to ask her.

we've found some through friends/contacts, several who have stayed with us pass our info on to others they know are coming to our hospital. there's a site through the medical schools that offer-up rooms, but I believe you have to have an e-mail domain that corresponds with one of the medical centers that participates to post there.

vlagrl29 · January 2015

I have a friend that rents out 2 of her bedrooms to other people that they didn't know before. Personally I wouldn't like sharing my space with others and wouldn't do it. BUT I don't mind if we rent out DH's photography studio to other photographers as a work space. It all just depends on your comfort level I guess.

formerlyGDaisy09 · January 2015

vlagrl29 said:

I have a friend that rents out 2 of her bedrooms to other people that they didn't know before. Personally I wouldn't like sharing my space with others and wouldn't do it. BUT I don't mind if we rent out DH's photography studio to other photographers as a work space. It all just depends on your comfort level I guess.

yes! this is why we're choosy about exactly who we rent to. the medical professionals are generally working 12 hour shifts and really just need a space to eat and sleep. the guest artists are generally here for a performance so they also have crazy hours and just need a place to sleep.

Erikan73 · January 2015

If you can collect some rent from a summer intern I would do it because they will impace your utility bills being there. Luckily with the set up you have, they have their own space & can be responsible for buying their own food, but if you wanted to invite them upstairs for dinner occasionally so they don't feel so left out, then you have that option. Just figure out rules you and husband want in regards to noise level, parties, access to different things like laundry room, grill outside if you have one, etc. If you have the rules established it will make it easier for everyone involved.

hoffse · January 2015

Erikan73 said:

If you can collect some rent from a summer intern I would do it because they will impace your utility bills being there. Luckily with the set up you have, they have their own space & can be responsible for buying their own food, but if you wanted to invite them upstairs for dinner occasionally so they don't feel so left out, then you have that option. Just figure out rules you and husband want in regards to noise level, parties, access to different things like laundry room, grill outside if you have one, etc. If you have the rules established it will make it easier for everyone involved.

That's a good point. I forgot to mention laundry - there's actually a spare washer/dryer located in the unfinished space in the basement. The previous owners actually sheetrocked around that space and installed a slim door after the washer/dryer were in place, so there's no way to get them out without cutting out those walls (facepalm - seriously, these people were full of "great" ideas....). Those aren't the walls that the plumber is considering tearing out, so I would prefer to leave them in place to save us some work. I'm not sure if the washer/dryer down there work, but they might. The laundry we use is upstairs. Obviously if the basement ones don't work then we would need to provide upstairs access for that sort of thing.

I REALLY wish we could get the old washer/dryer out without removing some walls because we actually may be getting a stacked unit for the upstairs later on this year or early next year. The side-by-sides we currently use are just an inch too big to fit next to each other upstairs, so the laundry area is incredibly inefficient. The washer and dryer are kitty-corner to each other instead of side-by-side. It would be nice if we could move the current ones down to the basement since we know they work, and there is plenty of room for them to sit side-by-side down there. Sigh.

We definitely have a lot to think about, but we're not on any firm timeline.

formerlyGDaisy09 · January 2015

hoffse said:

Erikan73 said:

If you can collect some rent from a summer intern I would do it because they will impace your utility bills being there. Luckily with the set up you have, they have their own space & can be responsible for buying their own food, but if you wanted to invite them upstairs for dinner occasionally so they don't feel so left out, then you have that option. Just figure out rules you and husband want in regards to noise level, parties, access to different things like laundry room, grill outside if you have one, etc. If you have the rules established it will make it easier for everyone involved.

That's a good point. I forgot to mention laundry - there's actually a spare washer/dryer located in the unfinished space in the basement. The previous owners actually sheetrocked around that space and installed a slim door after the washer/dryer were in place, so there's no way to get them out without cutting out those walls (facepalm - seriously, these people were full of "great" ideas....). Those aren't the walls that the plumber is considering tearing out, so I would prefer to leave them in place to save us some work. I'm not sure if the washer/dryer down there work, but they might. The laundry we use is upstairs. Obviously if the basement ones don't work then we would need to provide upstairs access for that sort of thing.

I REALLY wish we could get the old washer/dryer out without removing some walls because we actually may be getting a stacked unit for the upstairs later on this year or early next year. The side-by-sides we currently use are just an inch too big to fit next to each other upstairs, so the laundry area is incredibly inefficient. The washer and dryer are kitty-corner to each other instead of side-by-side. It would be nice if we could move the current ones down to the basement since we know they work, and there is plenty of room for them to sit side-by-side down there. Sigh.

We definitely have a lot to think about, but we're not on any firm timeline.

That sucks! BUT Thanks for mentioning, as we aren't planning to move our washer/dryer when we finish the basement I'll be sure we make sure our plans would allow us to get them out!

CuriousKiddosMama · January 2015

Wow those people were stupid!!!! Aparently they never had an appliance break down. It sounds like you have a decent game plan though.
And I'm sure you know this- but make sure you have a contract and sit down with them before they move in to go over expectations and to answer their questions.
If you do go with a summer intern, after they pass the bar in November, would you be inviting them back or letting them stay through then? Or does your firm not keep interns on during the school year. Assuming it's a student with loans they may appreciate a cheaper place to stay than renting their own apt- if they are mm anyways.

hoffse · January 2015

vikingsfan711 said:

Wow those people were stupid!!!! Aparently they never had an appliance break down. It sounds like you have a decent game plan though. And I'm sure you know this- but make sure you have a contract and sit down with them before they move in to go over expectations and to answer their questions. If you do go with a summer intern, after they pass the bar in November, would you be inviting them back or letting them stay through then? Or does your firm not keep interns on during the school year. Assuming it's a student with loans they may appreciate a cheaper place to stay than renting their own apt- if they are mm anyways.

Law firms are strange animals. The primary hiring period is the summer between the second and third year of law school. Most of those programs span 6-12 weeks, and then the intern gets a permanent job offer (or not) at the end of that summer. They then have one more year of law school to complete before graduating, and then they take the bar exam at the end of July following graduation. Most law firms then start full employment sometime in August or September following graduation.

Finding housing for those 6-12 weeks of the internship can be difficult in our city, because the largest university in town doesn't rent out dorms during the summer to non-students, and most students who have apartments here don't leave for the summer (it's a fairly regional school, not a national one), so subleasing is a challenge too. Those that do sublease try to get tenants for the entire summer. When I was an intern I wound up spending 6 weeks in an extended stay hotel because I simply couldn't find anything else that would do a 6-week stint. It sucked.

CuriousKiddosMama · January 2015

Ok, yeah I totally forgot how that worked. I have a friend whose a lawyer too, but it's been a while since she was in school. I think that could be awesome for whichever intern you have stay with you because I can only imagine how badly the hotel sucked. If you like them when they stay, you may want to then offer for them to stay again the following year from whenever they start with the firm until they start making their lawyer salary.

Xstatic3333 · January 2015

It's a small issue @hoffse, but I don't think you're obligated to provide access to a washer and dryer to someone you're renting to. I had many, many apartments where I had to go to a laundromat. Hopefully the downstairs units work and it won't be an issue, but just in case.

Erikan73 · January 2015

Xstatic3333 said:

It's a small issue @hoffse, but I don't think you're obligated to provide access to a washer and dryer to someone you're renting to. I had many, many apartments where I had to go to a laundromat. Hopefully the downstairs units work and it won't be an issue, but just in case.

Totally agree that you don't have to give them access to washer & dryer, but just put it out there to start if they do or if they don't. Nothing wrong with sending them to the laundromat so they don't jack up your water bill, but if they know what they can or can't do, you won't come home one day to find them in your part of the home doing their laundry either.

shakinros · January 2015

Gdaisy09 said:

We will also donate the use of our space to local NFP arts organizations that need short term housing (usually 1 week to a month or two) for visiting artists.

Slightly OT, but OMG thank you for doing this. It used to be my job to find this kind of housing for visiting artists and it would be HELL without generous, dependable people like you out there.

formerlyGDaisy09 · January 2015

shakinros said:

We will also donate the use of our space to local NFP arts organizations that need short term housing (usually 1 week to a month or two) for visiting artists.
Slightly OT, but OMG thank you for doing this. It used to be my job to find this kind of housing for visiting artists and it would be HELL without generous, dependable people like you out there.

It helps that I'm on the board for the local ballet company, so I'm pretty in the loop when there are artists coming that need housing. seriously, looking at the financials of these organizations they wouldn't survive without donated housing!

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