How Many People Rent Part of their Home Out?

[Anonymous]

I've done it for 10 years and it works great. The apt has separate entrances but I always interviewed as if I the tenant would be a roommate since we are under the same roof. Have had great luck with Craigs List. Now I have 2 kids who live above them so they need to be ok with the pitter patter of little feet.

[Anonymous]

Anonymous wrote:I've seen more and more people renting their basement or part of their home out as a source of income. The idea seem like a good option but was wondering if there are other cons or pros I don't know about.
The reason I am asking is because we would have to do some modification/remodeling so we would have to invest so $ up front.
Please share your experiences (good and bad).
Thank you much!

Are you in DC? You're supposed to have a certificate of occupancy if you rent out your basement apartment. Lots of people do this without it but if you get caught it can be a mess. You're also supposed to have a basic business license and there's a lot of paperwork that has to be done.

I say all this because we have a rental but we didn't get a business license. We've been paying taxes on the income and I guess the contractor DC hired saw it on our Federal taxes because we got a notice that we had to apply for a business ID and then get a license. Part of that proces is getting the Certificate of Occupancy. I had previously not done anything about this because I wasn't sure the apartment had it. The previous owner said he had it but had never sent it to us. It turned he that he had had a COO and that we were able to change it over into our name. But if we hadn't had it, we would have had to go through an inspection, maybe make expensive modifications, or even maybe not be able to rent it out. I was really sweating it until I found out that the COO existed. In your case, you should have a licensed DC contractor do the work and get all the appropriate permits. Then you would have to go through an inspection before you can get the COO.

Also, be aware that if your tenant feels you're not living up to your duties as a landlord and they find out you don't have a COO, they legally don't have to pay you rent. Something to keep in mind.

That said, we were able to rent for a few years without having to go through this. You may be successful in doing that if you're just looking to make some money for a short time. But I wish we had checked on all the requirements at the very beginning so we could have avoided what was a very anxious time.

Anyway, if you're not in DC it may be easier/harder. But before you spend a cent, be sure you know what the regulations are in your community!