If you have extra space in your home and you live in a desirable area for renters, you may have an opportunity to make some extra cash! If you’re interested in remodeling your home to create an income property, here are a few things to consider.
While people rent homes in every corner of the country, cities and suburbs with a good job market and a higher cost of living are typically more successful for in-home rental properties. If you’re considering this, work with a local real estate agent that specializes in rentals first to make sure the space will be easily rentable and find out the average income you can expect for the area and space.
While basement apartments are the first to come to mind, it’s just as common to remodel a space over a garage to create a rental loft. For empty nesters with big houses, a split floor plan or upstairs/downstairs setup is ideal for rental space as well. Keep in mind that in this scenario, you’ll be sharing common space like the living room and kitchen with your tenant, where a basement or loft space could be all-inclusive.
This is another question for a realtor. What do renters in the area expect? What are they willing to pay for? While common sense dictates that a full, private basement apartment would fetch more money than a room rental, young professionals who are always in the city may not want or need a full apartment. Knowing your area’s demographics and rental market is critical to planning your income property for the best ROI. At minimum, you should be willing to provide a private bedroom and bathroom.
Unless your tenant is Aunt Margaret, chances are they’re going to want some degree of privacy. A separate entrance, as with garage lofts and basements, is a convenience to your renters, and it also affords your family additional privacy. Kitchens are another convenience that is important to some renters but not others. While you can usually install a full kitchen in a basement apartment, often a kitchenette is better suited to a loft. Even room renters will appreciate a mini fridge and coffee pot to minimize their trips to the kitchen.
Keep in mind that there are certain legalities surrounding rental properties too, and the space will need to meet local building codes and zoning requirements to be deemed a legal rental space. While your basement living quarters may be acceptable to some renters, if it’s not up to code, you can’t just slap a “for rent” sign on it and start collecting a check. Working with an experienced remodeling contractor is the best way to ensure you’re doing everything by the book.
If you’re considering remodeling your Naperville area home to create an income property, contact Synergy Builders at 630.293.8070 for a complimentary consultation. We specialize in home remodeling and basement design and remodeling, and we can help you create a rental space that will be appealing to local renters while giving you the highest return on your investment.