The housing prices here in Canada, especially in the big cities, aren’t getting any cheaper. To help offset the mortgage payments, an increasing number of homeowners now look to renting out a bit of their space. For homeowners fortunate enough to have multiple floors or a separated section, it’s a simple decision, but most homeowners make do with renting out the basement.
If you count yourself in that camp, take note: renting out your basement is a fantastic idea, as the money is good and (if all goes well) the job is hands-off. But in order to rent it out the right way, there are a few steps you should consider taking.
Complete Renovations
The basement needs to be liveable, to accommodate a renter’s daily life and activities. That means, ideally:
- a separated bedroom
- a bathroom
- a kitchen
Unless you’re lucky (or well prepared) that means you will have to renovate. Find a reliable general contractor and share your thoughts about the space – what it will be for, what your budget is, and overall aesthetic you have in mind. Remember, the nicer the renovation, the more competitive the rental, meaning you can more easily recoup the cost.
Consider Soundproofing
As part of your renovation, definitely consider soundproofing the ceiling and/or walls. For their sake, but also for yours, you don’t want too much noise to bleed between the floors. Tensions around noise can sour a tenant relationship quickly. Ask your general contractor, before they start renovating your basement, to include soundproofing.
Choose the Right Renter
In other words, don’t just accept the first prospect to reach out. It’s okay to have standards (within reason and basic human rights), and it’s okay to vet prospective renters. You want to make certain that whomever you choose will be respectful of your space and punctual with payment.
It’s true, as well, what they say about renting to a family member: it’s not a great idea. If problems do arise, you want to be able to remain detached and impartial.
Brush Up on Rental Rules
There are tenant rights and there are landlord rights, and the more you inform yourself on the two, the better equipped you’ll be to manage issues. The rules change from province to province, but here is the official Ontario page, as a point of reference. This includes how and when you can increase rent, and rules surrounding eviction.
Notify Your Insurance
If you don’t notify your insurance of an incoming tenant, and something happens to your place, they have grounds to dismiss a payout. It has happened before, and it has left the homeowners in a costly, precarious position. For the small effort it takes, go ahead and do it right away (or once you’re finished reading this!)
As far as easy ways to make a buck, becoming the landlord of your own basement is one of the best. Whatever you invest in renovations will eventually pay off, and then some.