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Turn your basement into a rental

When you need help making ends meet, perhaps it's time to go underground.

Americans are rediscovering the versatility of their basements as second family rooms or recreation areas -- and as stand-alone units to rent.

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When it comes to earning money, basement specialist Brad Bishop, owner of Rembrandt Remodeling in Marietta, Ga., has been tapped to help everyone from the stereotypical widow on a fixed income looking for cash flow to young buyers who barely qualified for that new house in the first place. Even Bishop admits he's flirted with the idea of converting his basement into rental property.

"We have 6,500 square feet for just two of us. I haven't been in my basement in a year," he laughs.

Of course, this move requires upfront soul searching: Do you want strangers living in your home? Are you up to the responsibilities of a landlord? Do you trust your ability to screen candidates?

Remodeling to fit
If you answer "full steam ahead," your first stop is your local building department to determine if rental property -- yes, that includes your basement -- is legal in your neck of the residential zoning laws.

After you clear that hurdle, you must bring your basement up to the International Building Code, at least. (Many municipalities impose additional or stricter standards.) This boils down to installing smoke and carbon-monoxide detectors, the proper number of electrical outlets per linear feet of wall, adequate ventilation, proper firewalls and heating and cooling capacity. Additionally, you need an egress for every bedroom you add, which commonly translates to new windows, construction experts say.

Because they need to be large enough for a person to escape through in an emergency, plan to spend between $3,500 and $6,000 per window, plus installation, says Jeff Van Sloun, vice president and general manager of Owens Corning Remodeling.

"A lot of homeowners try to make the existing windows bigger," he says. "That's typically not the best solution. Sometimes it's easier to start where there's no hole at all because egress windows need to be lower to the ground. When you start cutting existing openings to those requirements, that's a pretty big hole!"

Consider this a job for a structural engineer -- even the direction the floor joists run affects the structural soundness of the finished project.

Don't completely despair the cash outlay -- basement windows add value via the natural light they contribute to the environment, says Paula Marshall, the Meredith Books editor of "Complete Basements, Attics and Bonus Rooms." If you spring for the energy-efficient panes, you'll increase noise insulation and security at the same time.

Finally, you'll need a separate, outside entrance to the new basement apartment. Bishop further recommends putting doors at the top and bottom of the interior stairs to allow both parties to lock the other out of their private spaces.

But don't put away the hammer and saws yet. You need to invest in a few cosmetic changes to your basement, no matter how nice it is, to compete with the apartments and studios in the local housing market. These rivals offer kitchens and bathrooms, so dangling room to park a bed next to a television won't cut it. You'll need to construct these separate quarters -- a relatively inexpensive addition of studs and drywall if your basement is unfinished, Bishop says.

Just be sure to draw up a layout plan that avoids putting the tenant's entertainment section directly below your bedroom. In fact, stacked television rooms lead to tension, too, since both families inevitably try to drown out the bleed-through noise.

Next: " ... no downsides to taking this plunge."
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