Should I do a heloc to create a rental in my basement?

[Brenden Sperl]

My monthly payment for my house with utilities is around $3000 because of interest rates. I could get around 50k through a heloc and renovate my basement into a two bedroom one bath apartment, hopefully getting $1500 a peice in rent to cover my mortgage. Is this a good idea? Or should I be looking for better deals that will cash flow more. 

[Ty Coutts]

Hi Brenden,

Your plan to use a HELOC to convert your basement into a rental unit sounds like a solid house-hacking strategy, especially if you can get $3,000 in combined rent. This would effectively cover your mortgage and significantly reduce your living expenses. However, make sure to account for renovation costs, HELOC interest, vacancy rates, and local rental laws. If the numbers still work, this could be a great way to leverage your current property. That said, if you have the option to invest in a better cash-flowing deal elsewhere, it's worth running the numbers to compare returns.