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Making Money with your Finished Basement in Denver

January 18, 2017

With the real estate market in Denver being red hot, there are fewer and fewer rental options for tenants who don’t want to live in apartment buildings. Rental homes, carriage houses, or garage apartments are often snatched up quickly. Adding to the demand, spaces such as these are now being rented nightly through websites such as Vacation Rental By Owner or Airbnb often fetching homeowners 4 or 5 times the price they would get through a standard monthly lease. Basement finishing is one of the best things you can do make your home more comfortable and to increase its value as well.

Value Benefits

Anytime you finish additional square footage on your property whether it’s building an addition or finishing a basement or attic, you are adding value. When you are looking to sell, if your home is centrally located it may be especially attractive to buyers with larger families who want to be close to the culture and convenience of the city as opposed to out in the suburbs where most larger homes are located. Increasing your home’s value may allow you to drop costly mortgage insurance or qualify for lower interest mortgage loans.

Rental Tax Benefits

With strong rental prices in the Denver area it is estimated that rental income can cover more than half of your mortgage, paying for the cost of renovations in less than a year. In addition to rental income you might also reap some tax benefits from a basement rental. First of all there are many deductions you can take for the expenses of renovating your property. If you choose more efficient appliance and power options, there are several eco-friendly rebates you can apply for as well. If you are renting out a space in your home, you can also depreciate that portion of your home. Be sure to consult your tax advisor about the specifics.

Greater Flexibility

If your family is growing it may be much more economical to expand your current living area than to buy a bigger house. Real estate prices are through the roof and the cost and headache of moving can really set you back. You may also just want the flexibility of having an extra living area that is somewhat private for visiting family or friends or so that an aging family member can spend more time with you while still enjoying some privacy and independence. Having a space for older kids to hang out away from their parents is a great way to keep an eye on them while still giving them a little space to have friends over for movies or videogames without taking over the living room.

Code Considerations

  • Plumbing and electrical may need to be updated if you are using the space for a rental.
  • There may be zone restrictions regarding basement apartments in your neighborhood.
  • Additional egresses may be required according to zoning safety laws.
Whether you’re looking to turn your basement into a moneymaking opportunity, share it with family, increase your home’s value to sell, or simply expand your living space, let us help! Check out our project gallery for some inspiration and call us at 303-346-6100 to schedule an appointment. We can do the project from start to finish or even just help you out with the plumbing and electrical if you enjoy putting in a little elbow grease yourself!