Waterproofing Basement on SFR Rental

[Alexandra Winkler]

Hi BP Fam! 

My significant other and I would like to rent out a house in Rochester, NY since we have a low interest rate. Our mortgage, PMI, taxes, and insurance is just under $1,300. It's a 4 bedroom 1.5 bath 1,538 square feet and a decent size fenced in yard. After doing research comps rent for $2,100-$2,300. We noticed some water/small flooding in the basement and had a few people come inspect the property. The previous owner painted over mold and did not do any kind of waterproofing. The lowest quote we got to install a waterproofing system and mold remediation was $19,000. We are debating on selling the house as is, or performing the waterproofing and financing over 5 years and accounting for the monthly payment as part of the rental's monthly expenses. After accounting for vacancy, potential waterproofing payment (~205/month for 15 years, no prepayment penalty), Capex, and repairs the net cash flow would be $303-$363/month. Do you think it's worth the headache to do the waterproofing and continue to rent the house out or should we sell and get out now?

Thank you in advance for your thoughts!! 

Allie

[Larry Turowski]

@Alexandra Winkler I don’t know where your house is but generally it is not worth it. I get water in my own basement. I’d say more than 50% of older homes in Rochester do.

Here is what you should do in order of importance. 1) keep a dehumidifier running 24/7 in the basement, draining to a floor drain or put it up on a stand and drain into the utility sink. 2) install a sump pump. 3) get rid of the mold and dry lock (type of paint) the basement walls. 4) grade the ground away from the basement.

And I don’t know that I would do #4. It can be tough to accomplish on some lots.   oh and make sure gutter downspouts are extended to dump water at least 3 feet away from the foundation.