Thinking of renting out your basement for extra cash?

I am in the upholstery business and have been for the last 40 years. I didn't go looking for it, I fell into it through family.
It was a choice I regret and would never ever encourge any body to do this kind of for to many reason's I can't even
begin to tell you in a short email. I will tell just a few. In 1983 at that time I was a dine a dozen, I couldn't find work in
Toronto, Ontario so I moved out west to work in the upholstery Industry. There where over 85 upholstery shops with 4-5 people on staff on average. In the last twelve months 8 more shops have closed down in the Edmonton surrounding area.

We are now down to maybe 27 shops with maybe 1-2 people on staff, 22 of the 27 operate from a double car garage. It does not have an association, it has never been a trade. There is little to nobody coming into this line of work to continue.
Most of the new upholstered furniture is made offshore in china, and 90% of it if not more is 30% quality at best!

The average consumer know the difference between Quality and Quanity, there is a huge difference!. Most boxed stores
sell cheap quality at huge profits, fooling the consumer into thinking that they have qaulity. I hear it from the consumer on a daily basis how much they paid it, and after 6 months to 1 year its falling apart.

The prices that the boxed stores are selling there products at is prices from the 1970's since when does anybody here work for 1970's wages? Most upholstered new furniture that the boxed stores sell is not made with maple hardwoods,
dowl, glued and screwed frames, there made with partical board, plywood, MDF board. People need to think about all
the toxins, and gases that are in the frames, that there breathing in every day. Then they will understand why their are more people sicker now than ever before! Don't be fooled by the store telling you that its made in Canada, ask where its
made,where the manufacturing plant is located, what type of production was used, how the product was made, ask to see the frame with out the lining on the bottom of every piece.

Its also interesting to me that GM could fly down to meet with the U.S. senetors, look for a bailout talk to them about saving jobs. The so called leather covers for trucks, cars, SUV's are all made in Mexico. Funny I thought that they where talking about saving jobs in the U.S. The same applies in Canada with G.M. Canada! What the heck are they talking about. and who the heck do they think their fooling! (Made in Canada)

I have renovated half a dozen basements 4 of which were income suites. The cost of doing them was double that which they talk about on the "Income Property" TV show. It isn't possible to do that kind of work as economically as they would have you believe. Reno work on old houses is like opening a can of worms. If I had to guess I would say Home Depot, Rona and Lowes sponsor these shows to generate interest in people who have no idea what it takes or how much it really costs.

If you can put out of your mind that news piece a few years ago in Toronto about the basement tenant coming upstairs, kidnapping and murdering the 6 year old daughter.
Then, then it sounds like a great idea.
Heck, why not lodgers in the attic and Garage too?

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Becoming a landlord in this time is a constant source of headaches even after doing due diligence and checking out all references. I had a slew of immigrants and local renters with no reliable references. Most of them were arrogant and would probably be nightmares as tenants. The laws in place clearly favour the tenant so if you decide to be a landlord make sure the rented property is away from your primary residence. Also, many "good" tenants cause average to excessive damage without your knowledge (fail to report water and sewage leaks, etc.). Do yourself a favour and stay out of this if you don't have a thick skin!

Nice article.. Very clear views.. Thanks for sharing this...

Yeah...just remodel your basement, get renters in and everything will be ok...did a child right this article? if not it was certainly someone with dollar signs in their eyes and well...droppings for brains.

First of all, most people are broke, including single dwelling owners, especially them. Where is the money going to come from? let me guess..re-finance? that's just lovely lets pay interest on top of the interest that we have all ready paid over the years and start from scratch, banks love it.

Secondly, now that you have gone probably twice as much in as Frank stated its time to get animals(oops I mean renters). Renters for the most part(I've been a landlord since I was 23years old, I'm now 40) are ANIMALS. They don't own therefore they don't care. Like Dave K mentioned they either have no references or no money or both and you just can't take a chance after being burned, in my case many times due to the fact that in Debtario(ontario) it takes months to get deadbeat renters out and if they are living under the same roof as you(literally) wouldn't that be lovely? How about if a fire broke out? Oh wait..isn't there a man hunt in quebec right now for a renter who torched his place and killed three other people? me thinks there is.

So dollars in your eyes says wow!! $1300 extra a month, that will take you at least 4 years in before you even break even and profits? good luck.... best case scenario, which I have never encountered once in my 15+ years of managing rental properties. I once had vietnamese people create a rice paddy in one of the bedrooms, I'm not making this up. It was $15,000 to replace then entire floor and roof of the lower apt. Sure them right? yeah....get money out of an immigrant....good luck with that.

The author of this article is grossly misleading people and obviously doesn't have the first clue about renting or property management. Don't under any circumstances rent out your basement as a seperate unit, if you must rent out to obtain income rent out rooms and have shared living space, this will not fall under the tenant landlord act and you will have rights to kick people out for non-payment or whatever if you are sharing a kitchen, bathroom or other common spaces.

This article is by far the stupidest brainfart I have read in recent years, it makes Robert Kirosaki's 3am infromercial of him trying to sell me used cassette tapes more plausable to become rich.

It seems to me they're saying it's not a good idea overall. Besides an apartment set up in an older home is a lot different than taking in boarders. You may well be able to 'kick people out for non-payment' but why would you want to share bathroom and kitchen with them in the first place? Students, maybe, if you miss your kids but roomers seems to be the worst possible solution in terms of privacy and aggravation ... and how much could you really make in $$?

I agree with most of the comments. No way would I EVER consider taking on renters. I was a landlord when I was a student long ago, and although the rent covered my mortgage and expenses, the hassles were not even close to being worth it. I bought another house a while back. The previous owner had rented out the house. The tenants were absolute ANIMALs (to use Al's word). Even getting to see the house before putting in an offer was a challenge. The condition of the house was soooo bad that I got it for well below market value, and it took several years to rennovate. My advice to anyone thinking about this: take a hammer and beat your head until you have completely lost all memory of such a thought!

While I have always been a model tenant, In fact, a landlord's dream tenant, many renters are not like me. The author of The Wealthy Barber states that being a small landlord has the highest PITA (pain-in-the-ass) factor of any form of investment. Having watched 3 sets of relatives make a stab at being landlords (either renting out their basements or owning a single investment property divided into a couple of apartments), I would have to agree. Unless you already know your prospective tenant very well, there really is no way to tell if someone who looks good on paper will be a decent tenant or a living nightmare. References may be genuine, or they may be simply a friend claiming to be a former landlord - there is no way to tell. As mentioned by others, it is nearly impossible to get rid of a tenant, whether it's due to non-payment of rent, wild parties that have neighbours calling the police, serious damage to the property, harrassment of you as a landlord or other tenants, or running a meth lab in the bedroom. If you are renting out a portion of the house you live in, remember that you cannot do anything to stop a tenant smoking (tobacco or any other product), holding drunken parties, having any number of pets of any size, having a string of prostitutes visiting on a regular basis (even if you have small chiuldren who will be affected) - when tenants are making life impossible for you and your family, leering at and harassing your adolescent daughters, making you sick with smoke, or causing your house to be overrun with rats and roaches because they have never cleaned, you can do nothing to get rid of them. When they finally do leave, you may have a horrendous cleaning job ahead of you (in one case, every square inch of the apartment was buried in cat feces and the floor have to be entirely removed and replaced), you may find so much damage that the house is no longer liveable, you may find that the tenant sawed out architectural features and took them with him. None of the three couples ever made more in rent than the tenants cost them, all of them lost a huge amount of money, one couple was under so much stress for so long that it broke up their marriage, and the daughter of one couple is still in therapy 2 decades later because of things done to her by a tenant and his friends. If I was sufficiently short of cash that I could not manage my mortgage without taking in a tenant, I would sooner selll my house and move into a rented studio than share my house with someone I didn't know.

You are right, the Government favor the tenant, I just could not understand, don't they realize, we have to pay mortgage, again if they worry about the tenant, well then government should take them and give them a place to live for free, see what happen, then we cold not pay taxes then everybody lose the job, maybe this is the best way, so it wont have anymore tenancy board.

I ve been losing a lot of revenue due to tenant not paying the rent, non of my complaint the Tenancy board help at all, infact they treat me as a criminal, they so meant and act worse then police, they think they are God, they do not know, at the end they will die, what are they taking to the grave yard? hate from people. ya good what ever happen after that, they are deserve it.

I agree that that there are a some tenants that don't give a damn about the property they rent but there are also many people out there that do. I happen to be one of them. I have been a renter for many years now. I have never missed or been late with my rent ever. I keep my place wherever it might be clean (under the fridge and stove too) and when I move out the place is cleaned from top to bottom (fridge and oven cleaned). When I listen to music it's with headphones on. I sincerley care about the people around me. I was raised that way. I am also on ODSP that's Ontario Disability Support Program ( which is a form of welfare) for medical reasons. There is a stigma attached to people on ODSP that were all drug addicts and drunks and don't want to work. There are alot of good people on this program who can't work right now for whatever reason that doesn't mean we all make bad tenants. I think the horror stories I've read here are not as common as people might think. I've also seen some landlords who just want to collect the rent and don't give a damn about their tenants. I've looked at places that are pure dumps with cockroaches and filth that these landlords want to rent for top dollar. It works both ways there are terrible tenants AND slumlords out there. Where I'm living right now the property owners have over two hundred building code infractions against them. Let's not forget about the infractions that community housing buildings owned by the City of Toronto have.

You actually can do ok with renting the basement if you follow what Al said and rent out the rooms only. Ie - if you have a 2-bdrm downstairs rent out each bedroom to 2 separate people. The rest is common area and free to all, including you if its set up right. You do have to give them a keyed entry to their bedrooms, but the living room, d-s kitchen, laundry, bathr etc is free to all. This way YOU dont share your kitchen/bathroom with boarders, they share among themselves. And its easy to keep an eye out for damage, drugs, etc Obviously you need a separate entrance to basement as well. Under those circumstances, it can be very tolerable, depending on the renter(s).

@Tony Shintani where the heck did your upholstery rank come from? After reading it I totally forgot what the original article was even about that you were supposedly responding to. I love it buddy, hijack whatever soap box you can and tell anyone who will listen or is even in earshot of you your plight. You rock!!!

You only hear about the horror stories with rental properties, wise people that make wise choices dont get ripped off or brag about the money they have made. I will just leave it at that..... ;-)

Perhaps I have been lucky...perhaps I have the right approach.

I only purchase properties in quality areas that will attract quality prospective tenants. I don't rent to students, I don't rent to anyone that is unemployed, I don't rent to two young men that are not in a relationship but yet want to live together that are likely going to be living a crazy life. I do credit checks, check references and I also use the landlord feedback service to screen tenants.

At least this way you increase the probability of success...if you think a $158,000 3 bedroom apartment is a great deal that is just going to be spewing disposable income and fat capital gains, you are only going to get crap tenants that cause neverending grief. Save up longer to buy a nice property, that has at least two people living there in a nice neighborhood and you will increase your chances to success exponentially.

Maskell you can make all the wise choices you want, you can't make someone pay you rent, you can't force someone to do anything. What does 'wise' have to do with anything? watch the movie Pacific Heights, the guy drove a 911, he wore nice suits, it appeared he had money...he had none and was a psycho.

Mike has it right, if you deal with crap you get crapped on. Never again folks, not enough Tylenol in the cabinet to deal with welfare mothers and their rats(children).

Thank's Bob's your uncle, Some how it came up on this page as well?

I was posting my comment on the made in Canada page, would you buy Canadian? As mentioned in my earlier
comment our Industry chose free enterprise, vs becoming reconized as a trade. Big mistake by the industry over
50 years ago, I do educate as many customers as possible about what choices they have, the difference between
quality, and quanitity. Many are shocked and cannot believe what I show them when they see the cheap quanitity
passed off as quality. Its all true, most automotive leather, vinyl covers are not made here in Canada, U.S. but are
in fact made in Mexico. When the automakers went to both Governments, Canadian and U.S. looking for a bailout,
so they the automakers could stay in business and create jobs, why didn't they ask the automakers where are these
jobs located. In what country are they located. Where they not in fact looking for money from the U.S. and Canadian
Governments? I didn't realize they were talking about jobs in Mexico, with our tax dollars, did anyone else!

Great advice, I appreciate all the advice. I’m excited to set up our basement apartment! We plan on buying a new fridge, stove, toilet, and sink. The shower is brand new never been used. We plan on advertising all of this and using it to our advantage. I ABSOLUTELY agree that it should be a rental that you would want to rent. I want this place to be a place I would want to live in. If it can meet those standards, I’m certain I can find a (good) renter. Nice way to earn extra money. You can even rent out your spare car if you have. Or the parking for that matter. I have a friend who lives in downtown Chicago, he rents out his parking during office time and earns handsome money.