Monday, January 27, 2020

4 Financial Benefits of Finishing Your Basement

When your home has an unfinished basement, you should know that there are financial benefits from renovating the basement so that it is more usable. Here is how experts believe that a finished basement can improve your financial situation.

Renting a Basement Apartment to a Tenant

If you create an entire apartment in your home’s basement, then you can rent the space to a tenant, helping to improve your financial situation each month. You must remember to create a usable space according to the local building codes for apartment rentals. 

In addition to having a bathroom and a kitchen, you may need to add a separate entranceway to the basement apartment along with making sure that there are fire exits available. You should determine how much you can charge for the apartment by checking the listings for similar rentals in your area.

Short-term Rental Income

Today, it is possible to offer short-term rentals to tourists. This is an excellent way to earn additional income if you live in a region where tourists are looking for places to stay. 

If you live in a city where it is difficult to find hotel rooms during major events, such as regional festivals, then you can offer the short-term rental basement to tourists only a few times a year. Again, you must determine what the local regulations are concerning short-term rentals to travelers.

Paying for Your Home Faster

If you finish your home’s basement, including basement waterproofing, then you can use the income from renting out the space to pay off your mortgage faster. Paying for your mortgage faster will improve your home equity, and this means that you will have a higher credit rating, making it easier to apply for other types of loans. 

You might not think that this is important, but when you want to apply for a vehicle loan or a student loan, having higher equity in a home can reduce your interest rates.

Improving the Resale Value of a Home

When your boss wants to transfer you to a job in another state, having a home with a finished basement makes it easier to sell the property. In addition, you can get more money from the sale of the house because it has an extra livable space. When you hire a real estate agent, make sure that the individual understands that the basement has bedrooms along with a bathroom and a kitchen.

Last, if your family is expanding, then renovating a basement to create space for teenagers or other relatives is less expensive than moving to an entirely new home.

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