A Renovation Story

Get your nail guns and hammers ready

Feb 16, 2021

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Basement Apartment Renovation: Getting Started

Last year I told you How to buy a House and Live Mortgage Free and shared some details about my House Hack. For those who don’t know a house hack is where you rent out rooms or a section of your home to roommates/tenants to minimize your costs. In this article I wanted to share some details about how we found ourselves on this path and in this house.

The plans for this basement apartment began way before we purchased the property. I tend to get ahead of myself and plan for things I can’t even control yet. However, I think it was completely necessary in this case. You see I needed to know from the building department whether or not a basement apartment in the house we were interested in would be permitted, otherwise buying it would not make sense. Without a permit a basement apartment would not be possible and that was one of the main reasons we wanted the house.

I made a few phone calls to the building department, read over the code a few times and we came to the conclusion that it would more than likely be possible to rent it out. We weren’t sure what hoops we would have to jump through to make it happen but we were certain that we would at least be able to finish it.

Here were my concerns with the basement plan: the ceiling height, the means of egress and the planning board. In order for people to be permitted to live in a basement it must have a minimum head clearance. Would we meet the minimum? Well we measured and there was more than enough room from floor to joists, which means when we put a ceiling in we will still have more room than the minimum requirement. In terms of egress we have one giant sliding glass door but usually you need two forms of egress. However, based on our interpretation of the code at the time we thought we may not need it but we were planning on having to put one in just in case. Lastly and by far the most worrisome was dealing with the planning board. In order for us to do everything legally we would need their sign off. I asked the building department for their perspective on the matter and all they really said was “the board likes accessory units for affordability.” (not very specific…)

With that we decided to move forward and put an offer on the house. In retrospect, I should have done more research. I feel like we made a decision a little bit on a whim. We should have calculated all the costs, knew what all the permits and approvals would cost, and watched old planning board meetings to understand the process. But nope, we just went forward, bought the house and figured it out later.

Honestly, sometimes the best thing you can do is just jump in and figure it all out later. I could have sat there and analyzed the situation a million times (What if we can’t rent out the basement? Will our roommates upstairs be a good idea? What if another house comes on the market? What if the market changes? etc.) OR we move forward.

Real estate is all about carefully analyzing the numbers to ensure they work, factoring in the worst case scenario and the best case scenario. Then weighing the risks and the rewards against your own risk tolerance and making a decision to commit. Taking action is the most powerful result of this entire process.

What’s done is done because 6 months after submitting our application we FINALLY got the approval from the city planning board to build an accessory unit apartment.

Now the point in between approval and submitting our application is a real page turner, with crazy trips back and forth to the building department, the printers and a few stories about Lowe’s in between. Stay tuned for future newsletters where I’ll share the details of working with the planning board, the building department and notifying over 50 neighbors of our plans and getting their OK (yikes!).

The main take away is that if you are interested in investing it doesn’t hurt to do your research but at some point “research” becomes analysis paralysis and you never move forward. Get comfortable with the uncomfortable and make smart calculated decisions. Things could go wrong. Have a safety net and some savings to depend on if they do go wrong. Most importantly treat each failure and each obstacle as a lesson learned.

If renovating isn’t your thing then there are a ton of other ways to get involved in real estate investing. Be a passive investor and act as a private money lender, invest in a syndication or notes. There are many ways you can invest in real estate. Message me if you have questions about these.. maybe I will touch on them in another article.

Until next time,

Amanda

Please speak with a financial advisor or lawyer prior to getting started investing in real estate. Please consider my story here just a story based on my own experience.

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