Converting 2 Bedroom To 3 Bedroom In Basement
Here is my thought and I would like some input. In my location, there are tons of 2 bedrooms on the REO lists with full basements. Not so many 3 and 4 bedrooms. Obviously I can get more rent out of a 3 than a 2. My thought was to buy the two bedrooms and frame in a third bedroom in the basement. Put in outlets, lights and a closet. I know I probably can't resell it as a three bedroom cause of the egress requirement, but do any of you see a problem with me renting it out as a three bedroom to increase the cashflow on the property. The cost to add it on would be around 500-800. The additional cashflow would be around $75 per month. Also do any of you know what the section 8 ramifications would be? Such as can I rent it out to a section 8 tenant as a three bedroom?
Thanks
Joe
You need to put in an egress window. Sec 8 won't let you advertise it as a 3-bedroom, and if there is a fire, and somebody is trapped in the basement, your going to get hosed. I wouldn't do it, or make sure they have a fire extinguisher and fire blanket in that room at all times. Your just looking for trouble doing this, and giving landlords a bad name.
Danes right, mostly you just need a second exit from the basement (window is fine). Make that happen and you are good to go. Check your local building code.
Yeah, with an egress window in the "bedroom" your good to go. Just make sure its the correct size for your local building codes, you could call the section 8 inspection people and ask them what their requirements are also. All I mean by giving landlords a bad name is doing things on the dirty side, like bedrooms without emergency exits.
No I understand, I don't want to do things half assed. If I do add the 3rd bedroom, it will increase the property taxes yes? Will that happen right away or only when I sell the property?
Thanks
Joe
[addsig]
Well, that depends if you get a building permit for it...no permit, the assessor/equilization office never hears about it...The Sec 8 people might make you get a permit so that it is inspected by the city too, but that all depends on who you tell...I remember this office developer talking about how he completely rehabbed a 20-30 story office building without getting a single permit. To each his own.
FYI it costs me about $400 to hire out 100% materials and labor to cut a hole and put a window in concrete block foundation. If it is poored, it will cost more at about $800-1200. I haven't done one of these yet so I don't have a good estimate. I'm not even sure why it costs more.
If you can make the bedroom very livable then it certainly makes sense. You'll recoop your costs within 6 mo to a year for sure!
If I dont' get a permit, what happens when I go to sell it at a later date? Can I still have it appraised as a three and sold as a three?
If you're going to do the work, do it right and get the permit. It really burns me when someone starts recommending "don't ask, don't tell" approach to rehabbing/updating your properties.
Not only does the permit insure that the work is performed up to code, it will protect you should anyone decide to sue you because of some incident relating to the build work. Example: Handyman Bob is going to do this job for you for the great price of $300 materials and all. Great, you say, and Bob slaps up the work, of course, without bothering to get the required permits and inspections. Well, Bob wasn't all that great an electrican, installed some fouled up wiring, the place catches fire and burns down. Guess who gets sued? Guess who might get jail time for criminal charges because of it? If you guessed you, then you win (or lose).
However, take the same situation, the same sloppy builder, but add in the requirement that the builder get the required permits. Change one: chances are the fouled wiring wouldn't have passed, so the event wouldn't happen. Change two: If it did, then whoever performed the work (and pulled the permits) becomes legally liable for the damages.
Thats why you need to find a builder/handyman that is licensed (if necessary in your state), insured, has workman's comp, and pulls permits so that the worse case scenerio never happens to you.
Roger
Ok so let me work this out here a second. Lets say I am going to resell the property already rented out. IF I sell it as a three bedroom, then it will get taxed as one the next timeit gets assesed, If I pull the permit for it it will get assesed as a three bedroom regardless of if I sell it or not correct? So really it is 6 of one half a dozen of the other right?
Thanks
Joe
[addsig]
1. Look up the death of a Georgetown (I think) student in DC last month per fire in a rehabbed basement apt. Might be informative..
2. We converted a 1/2 ba to a full bath in basement of 2BR in Md. and got more from Navy Roomies. It does have a set of sliders for a walk out, tho, so maybe not the same. 8-)
Check the assessments rule where you are. Where I am the taxes are assessed on overall value and not on number of bedrooms.
get a permit. If your state s anything like around here you will be fined heavily if they ever find out (which they would if you rent it). Also, in some places it is illegal to rent an illegal addition/conversion. Convert, put in the egress window or a door. I say you do not necessarily have to say it is a 3 bedroom. You can use the "den, familyroom or even a bedroom." spiel. Here where I live if it does not have a closet you do not need to declare it as a bedroom. If you are going to cut out for a window then why not do a door and a window - it should not cost a whole lot more to do that.
If you pull a permit - as owner/builder you can choose to declare either only the labor or the materials. If a contractor pulls the permit they will normally declare the full value.