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Worth finishing a basement for whole home rental?

Hi All, 

We have a 3-bed, 2.5-bath, 2,000 square-foot, detached 2-story single family home in a relatively low-HOA subdivision with a community pool.  We bought the place in 2001 for $250k, it peaked at $285k in about 2004, and now it's hovering right around $220k.  Though it's value is still above the average for comparable homes in neighboring subdivisions and in the city, itself, it has definitely suffered an equity loss (though I am not upside-down, thankfully).  In consideration of this, I'm leaning toward renting it out.  Do you think this is a wise course of action?  And if so, is it worth finishing the 1,600 square-foot basement to add an additional bedroom (or two), plus a full-size bath and maybe an additional entertainment/living room? 

Would the increase in rent income justify the initial large investment?  And how many years do you think it would take before this additional revenue would offset the expense of finishing the basement? 
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September 01 2011 - Village East
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That is a local questions for a professional in your market that has seen what homes with and without the improvement do. How they function in the real estate market. Check with the insurance company too. Before starting the skill saw, having the material list completed, delivered to the project site.
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September 04 2011
Sorry, no one has a crystal ball.  I usually tell folks that are considering finishing the basement to do it for them and not for the possible return on their investment.

Are their more houses in your neighborhood with finished basements than unfinished ones?  Meaning; if that's the new norm, it could be justifiable.

Another thing I recommend is testing a rental ad and see which one gets a better response.






















































































 
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September 03 2011
 
Related Questions
Worth finishing a basement for whole home rental?
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Latest answer by Andrew Mooers
September 04 2011 | 2 answers
  • Asked by QueensKnight
  • In Rentals
  • September 01 2011
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