The Broadlands RE Trends: Basement Kitchens

Real Estate Agent with Your Castle Real Estate

Topics for Investors:  Basement Kitchens
You walk into a property you're looking to buy and rent and you walk down into the basement and voila! you find a full second kitchen.   Great!  You start calculating how much rent you could get if you could rent the downstairs separate from the upstairs and the cashflow is out of this world!  But wait, there are a number of very real problems with this scenario. 
First of all, it's illegal unless the property is zoned for more than one tenant and the property has been converted to non-residential use. But there are even more practical reasons why having two separate tenants is often not a great idea. The first is the utilities. Since it's a house there will only be one bill for Excel and water. Who's going to pay it?  Can you really get the tenants to pro-rate their share if you pay it?  Good luck.  Or do you just pay it, figuring the extra rent will more than offset paying the utilities?  Maybe, but what you'll find is that when a tenant is not paying the utilities they have the heat at 90 degrees all winter and every time you go to the house the kitchen sink is running.  
Your great cashflow gets eaten up by outrageous utility bills and you're back where you started. For these reasons and many more I suggest you don't try to put two tenants into a property made for one. But that doesn't mean the second kitchen has no value. It might be useful for an extended family who needs the extra space kitchen and might actually command a larger rent.  Check with your local building department and your insurance agent though, to make sure it's acceptable to have a basement kitchen in the first place.


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