Basement Apartment vs. Boarder

amother

Periwinkle

Wed, May 20 2015, 3:09 pm

Hi,

We bought a house in Monsey about 2 years ago. The house is on a hill so the basement is a walkout in the back. Right now, we can use the extra $ and as the basement is rarely used, would like to make use of that space. The question is if we should convert the majority of the basement into an apartment (leaving one small room for ourselves) or the option is to have a boarder/girl stay there.
Apartment:
* We would need to refinance (doesn't seem to be much of a big deal to get a new loan with the extra $40,000.00 and the only difference would be about $200 from our current monthly mortgage fees.
* This is going to entail construction & the hassle that such brings
* We will have a nice downstairs & at the time that I need the space, it will be nice as oppossed to the way it currently is right now (aside from the cracked tiles and drop down ceiling - it isn't the best sound proofed right now)
* Financially we can make that much more each month - we will be making a big one bedroom apartment and should be able to get $1,000 easily for such - subtracting the extra $200 that is still $800 a month.
* LEGAL - the apt would not be legal (please no bashing & let's not turn it into an 'illegal apt' debate!!)

Boarder (currently have someone interested):
* We will be doing practically nothing to the basement - adding a curtain, maybe a counter space, but basically giving it 'as is'. We will need to pay someone to bring down the extra washer & dryer we have and connect it but no big expense.
* We will be able to keep 2 rooms if we have a boarder as oppossed to only 1 if it would be an apartment (though we would be giving her the only bathroom downstairs).
* Easy/no headache involved in getting this going.

My feeling is that if we are going to anyways make an apartment sometime in the future, why not do it now already & 'gain' more financially?

Any thoughts/opinions?

water_bear88

Wed, May 20 2015, 3:13 pm

I would go with the boarder option, simply to avoid the headache (particularly the legal one), all the more so if you have someone already lined up. Easier to reconsider when she leaves than to do the construction now and then have difficulty finding a tenant/keeping a tenant happy when technically they could report you at any time.