This is the easiest post I’ll ever write.
- Rarely Legal
- Worst Tenant Demographic
- Lowest Income Tenant Demographic
- Worst Credit Profile Tenants
- Fire Code Issues
- New Landlords
- Utilities Sharing Problems
- High Turnover
- High Vacancy
- Weird Layouts
The source of all evil is probably a basement apartment. They are the source of landlord/tenant issues when the landlord lives upstairs or tenant/tenant issues when another tenant lives upstairs. If there’s pot smoking in your apartment 90% of the time, it’s wafting up the vents not down. Deadbeats love the damp it or just the smell of unsophisticated landlord that lives upstairs.
If you can explain to me why a tenant in his or her right mind would rent a basement apartment when they can rent an apartment in a building for the very same price or lower, I would love to hear it. Because they like the dark? or the sound of running feet overhead? Generally it’s because of the price or they can’t get approved in a building because of their nasty credit, poor work history or some other problem.
Cash Flow… Blah Blah Blah
I get it, you need the money from the basement apartment or do you really? By the time you add in the risk from the utilities problem and minus your split from the rent or add in the time spent chasing the money from the basement, is it really worth it? Plus here’s a secret, a whole house attracts the very best tenant profile of all. There are many people out there who don’t like to share their space or have had to move because of these tenant conflicts who want a whole house.
Hardest Properties To Manage
It’s the tenant/tenant issues that will drive you crazy, and the quality of tenant you get. A few months ago I rented a basement apartment for a reader of this blog. I rented it to a very nice seeming young lady, she’s a complete liar, she told me she was single, she’s not, her boyfriend looks like a hoodlum. Awesome stuff! Then there’s another one I rented just up the street here, nice young couple except they are dirty. More awesome. Basements suck.
The only people who are not aware of these issues are new landlords. They look at the numbers on a duplex and think they’ve hit the jackpot. They are buying into one of the more challenging kind of property to manage. They’ll often get into trouble, your tenant screening needs to be 110% for these apartments and even I get tricked. If it seems too good to believe it probably is.
Basement Apartments Are Not A Goldmine
For many landlords what seems like a great benefit just isn’t by the time you calculate all the time required. More seasoned investors often opt to rent out the house as a whole. All the utilities go into the one tenant’s name and the landlord no longer has to “manage” them or the conflicting tenants. I’m not sure why tenants who rent in a house often argue. In a building you almost never see these kinds of squabbles over smoking, parking, garbage, lawn maintenance and so on.
Great Areas Are Different
If you happen to be in a great area, you will get a decent tenant profile in a basement apartment and so go ahead and rent it out. If you are close to the subway, you’ll also get decent tenants. Once you get away from these areas, you’ll start seeing the problems appear. If it seems like you’ve had a string of bad tenants or aren’t impressed with the people you’ve had, maybe it’s time to look at renting out the duplex as a single family dwelling and gaining some peace and quiet.