Basement suite rental and conversion was once a growing trend, but today, more investors and homeowners are taking advantage of suites than ever before. With real estate prices at an all-time high and demand for quality rental suites insatiable, the basement rental suite makes so much sense as either an investment or a way to subsidize your living expenses. Given the current market dynamics, I believe it’s time we recognize basement suites as a mainstay rather than just a trend.
But even in cities where the vacancy rate is low, investors looking to maximize the income generated by their suites need to do some serious thinking. Here are three key factors that investors commonly overlook before renting out their basements.
I’m not really a touchy-feely kind of guy, but how a prospective tenant feels the first time they walk into your basement rental suite is your number-one selling point. Basements are notorious for being dark with low ceilings and little natural light. You want to aim for a bright, warm, fresh feel – and the best way to achieve that is with a proper lighting plan and large windows (or door windows) to let direct sunlight and fresh air in. With this combo, its easy to forget you’re even in a basement. A layered lighting plan is of the utmost importance; pot lights are the most cost-effective way to save space and provide dimmable LED lighting.
Having large windows can definitely be a challenge, as basements are usually stuck with smaller windows in general. Luckily, installing larger windows can be done fairly easily by cutting out a larger space in the brick/concrete, digging out a window well for proper drainage and installing a larger window. Not only does this let in needed sunlight and fresh air, but the window can be used as an alternate emergency exit if proper egress windows are installed. The investment here is well worth the return.
If you want your basement to look professional and function well, you should abide by the same design principles you would on the main floor of a house whenever possible. Open-concept layouts usually work best. Also consider traffic flow, sight lines and multi-purpose rooms.
Storage space is a huge asset. Lots of storage in basement apartments is very rare, so you must be creative to find cost-effective solutions wherever possible. If you’re stuck for storage ideas, here are three clever ones to take advantage of:
- The easiest solution is to use closet organizers that maximize storage options in the bedrooms. You can purchase basic wire metal organizers for $50 to $100, and this usually doubles or triples the effective use of space. If no closet is present, purchasing a wardrobe from Ikea is the fastest solution for quality storage. It’ll look pretty – for the right price.
- Take advantage of the void space left under the stairs leading down to the basement. Depending on the size and shape, that awkward triangular space can be fitted with shelves, coat hooks and a shoe closet, or a decorative sitting bench with storage below. I’ve also seen the space neatly converted into a corner office.
- Tackle the lack of kitchen storage ‘pantries’ between the studs. Essentially, you’ll cut out the space in the drywall between two studs and fit the space with MDF shelving to create an open-look pantry. The depth of the shelves can sometimes be restrictive, so trust your contractor’s opinion on this one.
You want to make people forget they live in a basement with amenities they would expect in a full apartment. Don’t worry – when you’re renovating from scratch, applying extra amenities can be more cost-effective than you think.
If space allows, why confine yourself to a mediocre bedroom when you can create a stunning master suite in the basement with a walk-in closet and, ideally, an ensuite washroom? Spending the extra money on an ensuite washroom may or may not be worth the cost – again, consult your contractor – but in a two- or three bedroom basement apartment, an ensuite washroom could be the perfect amenity that differentiates your apartment from your competition.
You can create a truly luxurious, spa-like bathroom with medium-end finishes, dimmable lights, a soaker tub instead of stand-up shower, tiled floors and shower, and even a double sink if space allows.
Always consult your real estate investment advisor and contractor on how to best position the apartment in your local market. You want to play to market demand and not create a space that simply appeals to you. Just because your suite is underground doesn’t mean it has to underperform.
Paul D’Abruzzo is a Real Estate Investment Advisor, industry-leading Realtor, speaker and private performance coach. He and his team specialize in the acquisition, purchase and sale of investment-grade property in southern Ontario. Get free instant access to real estate investment deals in southern Ontario before the general public and learn how to analyze them quickly and easily, just like the pros do, at investmentpropertyanalyzertool.com.
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