Remodeling or finishing basement on New home for househacking

[Matthew Cook]

Hello All, looking for some advice and cost estimation. I'm getting ready to sell my house in Westminster CO, and move a little bit north. I'm looking to purchase a home in Erie or Broomfield CO, where my family(2 toddlers, 2 huskys) can live comfortably on the first two floors, and we would rent out rooms/suites in the basement. We are looking at homes that are 3500sqft-5500sqft. There is a variety of homes that have walk-outs(ideal for separate tenant entrance) or we would have to create an entrance in a garden level or fully submerged basement. Erie is 30 minutes to Denver, and 25 minutes to Boulder so it has pretty decent access and is much cheaper per sqft than anywhere closer to Denver or Boulder. Our budget for the house is between $500-600k, and hopefully $40-60k for the remodel/finishing cost. 

A few questions. Does anyone have experience having a separate entrance dug out and built? Is there an approximate cost for this?

We are contemplating doing a complete basement finishing for about 1300-1500sqft, Space would be open concept kitchen/dining/living room, Master(ish) bedroom & non-shared bath, 2nd & 3rd bedroom with shared bath, then maybe a closet with stackable washer/dryer. We would be doing everything as cost effective as possible with materials, but contracting out a lot of the work. Does anyone have experience with this and have a cost approximation? This would be our first move into house/hacking. 

[Chris Lopez]

@Matthew Cook I just finished remodeling my walkout basement into a mother-in-law suite.  I'm not renting it out, rather it's for my mother in law who is helping with daycare. Rather than bringing in rent, we're saving thousands in daycare costs.

Don't buy a place that needs a separate entrance dug out. That's not a simple project and can get expensive really fast. Focus on places with existing separate entrances. 

The total remodeling costs depend on a lot of factors - from the quality of finished to how much has to be moved around. I bought a house that had a crawlspace, where the basement floor was not directly on the foundation. Much cheaper and easier to run plumbing without breaking up concrete. 

Does the municipality allow you to create a second unit and rent it out?  A lot don't. Legally, it should be zoned for more than one unit.

At a price point of 500K+ and a 50K remodel budget, you may be better off staying put and using the 50K budget as a down payment on an investment property instead. Or move into a normal house, do no work, the move after a year and keep it as a rental.

Adding 3 bedrooms, 2 baths and a full kitchen will most likely be north of 50K. I didn't add that much and mine was more.