Basement Dig-Out in DC

[Peter Street]

I recently bought a semi-detached house in Crestwood and have been exploring converting the basement into a rental apartment.  The space has a lot of potential -- it is ~900 SF and partially below-grade so there is good natural light.  A very conservative estimate of rental income is $1,500/month.  

Before buying the house, I knew I needed to replace the  HVAC and boiler and improve the drainage in the basement, so these items will be part of the project.

The scope of the work  includes:

- Underpinning one wall of roughly ~45 LF (because our footers are uneven).  Currently, there is 6'9" of clearance (below the 7' required for renting); underpinning this one wall gets us to 7'2.5".  I would love to get to 8' (or higher), but it just seems cost prohibitive.

- Installing perimeter drainage system, sump pump, insulating walls.

- Pouring a new slab.

- Cutting a new egress door.

- Finishing with Ikea-grade kitchen and bathroom.

- Replacing HVAC and boiler.

This will be my first construction/renovation project and I've been somewhat shocked by the proposed budgets I've seen.  The best proposal I've received so far is $260k all-in.
 

I'd love to hear any thoughts from folks with experience. Do you think this project is worth it? Is there a better way to approach it?

[Cynthia Hartley]

Hi Peter,

I bought a semi-detached in Deanwood. No, not the same as Crestwood, but it's still greater DC. I converted the basement to an accessory dwelling unit. The ceiling height was 6'9; requirement was 7'. While I too would have liked to have gone to 8', the rent would not have warranted the extra expense and going to 7'2 was good enough. Sq Ft was approx 600.

In addition I gutted the entire house and did all plumbing, electrical, gas (all separately metered). I budgeted $150k, but in reality it was closer to $185K. 

I think you should ask yourself if the ROI is worth the addition investment to go to 8' high ceilings, if you are not living there. Most renters don't care. If you can make your money back in 5 - 6 years, then OK.

Also keep in mind that if there are no other houses with accessory dwelling units in the basement, it is going to be difficult to get comps for a refi. 

I would love to hear what you decide to do. Please keep me posted.