Renting Your Basement – 6 Reasons You Should and 6 Factors to Consider

Whether you are a new homeowner who has just joined the ranks of home ownership, or a baby boomer with many years in your current home, chances are that you have unused space in your home. And chances are that you could use some extra cash. This article provides renting advice for renting your basement.

Renting Your Basement – 6 Reasons Why You Should:

1. That unused space could be an open, empty basement in your new home that can be developed into an apartment. It could be a developed space in your basement that is no longer used since the kids moved out and simply needs some renovations to convert it into an apartment. Renting your basement will make good use of that otherwise wasted space.

2. Developing or renovating a space in your home for rental purposes will significantly increase the market value of your home.

3. The income derived from renting a basement can be used to help pay your mortgage or, depending upon your circumstances, simply as extra income to use as you wish.

4. All expenses incurred in renting a basement can be claimed each year, which will reduce or eliminate any tax liability associated with your rental income. These expenses include the applicable portion of: mortgage or loan interest, property and water taxes, house insurance, utilities (if included in rent), as well as repairs and maintenance.

5. The initial cost of developing or renovating the space can be claimed for income tax purposes. This is done by using the capital cost allowance (CCA) rules which allow you to claim a percentage of the total cost, each taxation year. Note: CCA can only be claimed if you have a net rental income after deducting operating expenses as noted in item 4. above. It cannot be used to create a loss.

6. Many homeowners have discovered an unexpected benefit from renting a basement. That is the added security that comes from having another presence in the home, particularly when you are away. This is especially true when you develop a good working relationship with your tenant.

There are a number of issues to be aware of when renting your basement. For renting advice, see below.

Renting Your Basement – 6 Things to Consider:

The above information highlights the benefits and advantages of renting a basement. The following renting advice provides 6 things to keeps in mind should you decide to do so.

1. There is some planning involved when preparing to develop or renovate a space in your home for this purpose. The space must be of adequate size to accommodate the rental unit, and designed to provide the essential rooms and functions.

2. You must determine if the space is appropriate for a self-contained apartment, an apartment with shared amenities, or perhaps it is more suited to a bed-sitting room. This will depend on such factors as the size of the space, whether there is a separate entrance, and access to electrical and plumbing connections.

3. There are up-front costs involved in renting a basement, such as development or renovation, which must be funded. These will generally include labour and materials.

4. Unless you can do the work yourself, you must arrange the labour, which may involve local tradesmen or a general contractor. Be sure to obtain references when selecting a contractor.

5. You must familiarize yourself with municipal regulations which apply when renting your basement.

6. Enlisting the help and advice of a friend or family member who has some experience in developing and renting a basement will enable you to minimize the amount of work and the cost involved.

Once you have completed the project and begun renting your basement, you will not only have increased the value of your home, but you will have created a new and permanent source of income.

Search amatterofmoney.com

Leave a reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Google+