Hi Guys, Question to American home owners who have a 2 story home. Do people ever rent a basement suite to pay for their mortgage, it seemed a lot of people built these mega homes, I am surprised why they didn't build 2-3 basement suites to cover the mortgage? SikhInvestor
1) Sometimes. Rent the movie,"Pacific Heights", for more info. 2) Multiple-subdivision of a property can be more likely to happen in an urban area where rents are more stable and tenants are more plentiful.
Here is something for the OP to apply his brain cells to American houses often dont have basements. The reason is that it makes no sense to have them. It costs money to have a basement. Quite a lot of money - because oyu must exvacate quite a lot of gound. This makes no sense, unless one of the following conditions apply: * Real estate is expensive enough that it is cheaper to put in a basement than just to buy a bigger property. If real estate prices are cheap enough, it simply is cheaper to have naother 100 suqare foot for a 100 square foot storage area or whatever than to exvavate. Note that this means basements are more common in the city, where real estate prices are higher. * There are technical reasons for a basement. For example, when building high, I can see having a deep rooted foundation being a benefit. Which means expensive earthworks "anyway", at least partially. It is a fact that quite a lot of american homes have no basement. Sorry, guy. Please also note that the typical american way of building is not as expensive as the european one. Lots of US houses are build basically on stell / wood frames, not out of solid stone. Happens US houses are most likely not going to be there in 300 years. But seriously, who cares - i think that way of building makes a lot more sense.
I find that very surprising, the particular suburb in Vancouver that I reside where the average home costs about $550,000 USD and which is cheaper than Vancouver at $700,000 USD, most indivdiuals have basement suites. In fact, they have multiple basement suites, which give them about $500 a month per 1 bedroom basement unit. My uncle has a 7000sqft lot, has a decent sized new home on there, and has 3 basement suites, which give him about $1800 USD in rent alone, which he applies to the mortgage. So thats roughly $20,000 a year for your mortgage. And about $200,000 over the course of 10 years. That's why I have never understood how people can get foreclosed on a home that costs $100,000 or $70,000 or even $250,000. Why not just sublet your home, or whatever, have korean students living in your home.
Vancouver's real estate market strength may be a "special situation" because of the impending Winter Olympics.
Basements are more of a European "thing": http://www.thisislondon.co.uk/news/...+24+years+and+repeatedly+raped+her/article.do
I personally find it also surprising - but it makes a lot of sense, from a financial point of view. And the cultural issue also plays in - people just dont have that Not sure how things are in canada
In my home, Denver Metro, we have 2500sf main floors, and 1000sf basement, but not external access. You can't build out a 1k because of utilities, roughly 800 sf you could build out. Since I can't finish myself, its roughly $25k to finish it and I don't even know that I could excavate an external entrance. I have thought about moving my Mom down there because she want her own place, but I don't want Joe Schmoe walking through my living room to get to his pad. So at this point no go. BTW we looked at homes with a walkout basement, sliding glass door, 20k extra. So that would be 45k to get $750 a month roughly, that's a long time on the ROI. So why did I buy a "McMansion"? Because we planed on having kids and grandparents, but we changed our minds so there you have it. I can rent my place for about B/E so we may consider that. Now if in future we could get a walkout for a discount sure maybe.
A basement is generally regional in the U.S. If a home is built where the frost line is relatively low, the excavation cost to build a basement is obviously much lower than in an area where the water table is high or in an earthquake zone. So if you live close to the Gulf of Mexico, Cali or in a state where concrete slabs dominate because of the warm weather, like Arizona, you probably don't know much about basements. If you grew up in the North or the Midwest, you probably had a basement or at least had friends with basements. To say it makes no sense to have them or it's a European thing is just silly without at least telling us where you live. It's a big country.