Is converting a full basement into an apartment a good move financially?

Asked by Anne Ts, East Fishkill, NY Sun Jul 29, 2012

The show "Income Property" makes it look so easy, my in laws would like to ride out the current housing down turn, rather than downsize. Would a rental unit make financial sense, & increase property value? How are rents in that area? Thanks

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Anita & Lawr…, Agent, Wappingers Falls, NY
Mon Jul 30, 2012
You will need to check with the local municipality as to the requirements to convert the basement into an income apartment, Your in laws will need permits and inspections for a co, If the apartment is legal and to code it could be a desirable asset to the property. Rents are in demand in the area. The cost of the renovation vs the potential rent would be the determining factor as to whether a rental unitl would be wise A licensed professional realtor could advise you of the current rental prices and market needs in your area. Good luck to your in laws.
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Jacques Ambr…, Agent, Forest Hills, NY
Sun Jul 29, 2012
Well the first question is can you put a legal rental unit in the basement. Most prbably not, but you can check with the town to make sure. If you can then it does add value to have the possibility of adding a rental unit.
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Tammy Benkwi…, Agent, Somers, NY
Sun Jul 29, 2012
An "in law" apartment is different than a legal accessory apartment admit requires you to rent to a relative. Check with your town
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Patricia Pet…, Agent, Wappingers Falls, NY
Sun Jul 29, 2012
Yes, It is a good investment. Many buyers are looking for in-law apartments in homes.
Take Good Care, Pat
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Edwards Prop…, Agent, New Paltz, NY
Sun Jul 29, 2012
Yes it is. Make sure you check with town on all the requirements before you begin.
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Tammy Benkwi…, Agent, Somers, NY
Sun Jul 29, 2012
Yes, check with the town for both zoning and the building department. The basement has to meet certain safety criteria and must obtain a building permit and certificate of occupancy from the building department. Your parents may spend more in creating the finished basement than they will in rent in the short term since you mention they are riding out the market. I assume that means they waiting on prices to tick up before selling?

Don't forget, their property taxes will also increase. Will they be able to afford it even with a tenant?

Once they do go to sell, they will have a property that will be attractive to a smaller pool of buyers because fewer people want a multi family and even fewer than that want to pay higher taxes and insurance premiums.

Also consider whether or not your parents want to be landlords. It is NOT as easy as it may seem. What happens if the tenant doesn't pay the rent?

It's good that you are thinking this through.
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allan erps,A…, Agent, Pearl River, NY
Sun Jul 29, 2012
Hello, This is a tricky answer. If the money is needed and they can afford to a decent renovation it could work. However, will they be going to the Town for approvals & if not will a neighbor in the area oppose such an idea. Realistically if the tenant were related it would make things a bit easier. Best of luck
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Cindy Rosen, Agent, Montgomery, AL
Sun Jul 29, 2012
Anne make sure you check with your zoning board to see if this is legal or not. More and more people are coming to me with the idea of mom, dad or a friend living with them but with seperate quarters. With health care in the state that it is, the economy and difficulties of taking care of a loved one long distance, has made this into the option of the future. People are pulling their resources together to purchase homes but want their privacy. I think it is a very good idea!
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