Paying off your mortgage can be a long and arduous process, but it can go a lot faster with rental income. If you live on your own or are willing to live in your basement for a few years, you can make serious headway on your mortgage, but you have to do it right. Here are some simple tips to help you rent out your main floor, make some extra cash, and get mortgage-free faster.
1. Make Sure Everything’s Above Board
Illegal home renting may seem like a good idea in the short term, but long term, it will be a disaster. First and foremost, you probably don’t want people who are willing to live in illegal circumstances right above you, they will more than likely make terrible renters. But even more importantly, if something happens, you will be on the hook for anything. That could mean thousands, probably more, in damages, lawsuits, fines, and more, not to mention the possibility of jail time.
Before you even consider renting out your home, make sure you can by talking to your local tenement authority. An inspection will be necessary and you’ll be able to determine if your home is up to rental codes.
2. Take The Time to Know Your Tenants
The key challenge in basement living is finding good people to live above you, so be sure to thoroughly investigate any and all potential renters. This means background checks and credit checks, naturally, but also getting to know them on a personal level. You don’t have to become best friends (in fact, a more professional relationship is much more ideal), but you should get along. Ask them questions about their lifestyle and be sure to have a lease agreement that keeps both parties safe. And, if things aren’t working out, be sure to break the news with plenty of warning and as gently as possible.
3. Make the Basement Livable
It may only be for a few years, but living in a basement for a long time can come with certain challenges. Be sure to make your living space, well, livable. That means making changes to entryways, having a working kitchen and bathroom, and more. Without those types of amenities, you will drive yourself crazy in just a few short months.
4. Use the Income Wisely
The extra money you make from your rental situation has to go towards your mortgage. Many people are tempted to use the money for extras, like vacations or nice cars, but these things are not your actual goal. What you really want is your mortgage paid off quickly so you can be in a better financial situation. So take all the money and put it in a different bank account, keep the income above board, and use it to pay off your mortgage.
Living in your basement while renting out the main floor of your home is a simple, albeit challenging, way to pay off your mortgage quickly. If you’re thinking of doing this, be sure to find the right people and do everything on the right side of the law. It will keep you protected and make the whole experience better for you and your tenants.Posted by Gurpreet Ghatehora on