My husband and I bought our first house together one year ago. We had been married for three years and lived in three different rentals, and we were ready to settle.
We had a few requirements: The house needed a decent-sized backyard, three bedrooms on the main floor, an eat-in kitchen and minimal renovations. We also wanted a basement apartment, or the ability to turn a basement into a living space.
After a few months of searching, we found the exact home we were looking for. Normally it would’ve been out of our price range. But we had an unconventional plan for covering part of the mortgage: getting a tenant to rent our basement.
The money that comes in from our renter covers 65% of our monthly mortgage. That’s a lot! Imagine if you were able to offset more than half of your monthly payment!
Because this strategy has worked so well for us, we want to help others do the same. Here are five ways we’ve benefited from renting out our basement.
As I mentioned above, 65% of our monthly mortgage is paid off by our renter. This is a huge chunk of money.
My husband and I always wanted to pay off the majority of our mortgage with a renter. It allows us to have a nicer home than we’d otherwise be able to afford and decreases our expenses at the same time -- a win-win.
Before beginning the house search, we researched how much landlords were charging for apartments in our preferred area. Better yet, we tried to find out how much people were charging for the same type of apartment we hoped to offer to get an idea of what we could get for it.
Important considerations: the amount of bedrooms your apartment will have, the light in the apartment (especially if it’s a basement), a separate entrance for your renter(s) and the overall size of the apartment.
Also, we had a set amount we hoped to make as landlords. When looking at houses, we made sure the home we purchased would allow us to stick to this figure.
The $1,000 we make each month is an amount of money we can count on. We set up a payment plan that works for our renter and for us. And, since our tenant signed a year lease, we don’t have to worry about a suddenly empty apartment.
To get this arrangement, we had to pick a renter we could trust. We carefully reviewed applications and conducted interviews to be certain we were choosing someone dependable. This effort on the front end made our job as landlords easier over time.
By “easy income,” I mean low maintenance. After setting up the apartment and deciding on utilities, we have not had to do much (if any) work, yet we still continue to get paid. While complaints and repairs are on us, we’ve found the work to be minimal for $1,000 a month.
Steady rental income has positively affected our household bottom line, allowing me to forgo a full-time traditional job and work as a stay-at-home mom.
This has always been our plan, and it would be much harder to achieve if we didn’t rent out our basement.
In our house, we don’t have a TV room, play room or formal dining room. This also means we don’t have room for a lot of unnecessary items.
While less room might sound like a negative, for us, it’s a positive. Living in a smaller home and living simply saves us money, and makes us more grateful for what we do have. Having fewer rooms and less stuff also means we spend less time cleaning!
As I explained above, we carefully interviewed and got to know our renter before agreeing she could live in our basement. This is important, as this person(s) will be, in a sense, living with you.
They could be sharing your backyard or laundry room, and you’ll most likely see them quite often. You’ll want to make sure they are trustworthy, especially if you have children in the house.
Once you’ve found someone you can trust, it becomes a beautiful act to share your house. It’s easy to simply go from your car to your house without taking the time to talk to your neighbors. With a renter, you have the chance to get to know someone on a more personal level.
Plus, having someone live in our basement gives us a sense of safety. When my family goes on vacation, we trust our tenant to watch out for our house, and when I’m home alone with my baby on the late evenings my husband works, I have someone around in case anything goes wrong.
We’re happy with our living situation -- for us, renting out the basement has a lot of perks. If you’re looking for ways to earn some extra money, consider looking for a house with a basement apartment!
Your Turn: Would you ever rent out your basement to make extra income?
Esther Vandersluis lives in the city of Hamilton, Ontario, with her hard-working husband and energetic baby girl. She enjoys making their house a home through DIY decorations, writing about daily life and reading during naptimes. You can find her blog at www.abeautifulalarm.blogspost.ca, where she writes about living a life of intentionality and purpose by waking up each day with an attitude of gratefulness.