You'll also want to negotiate a "partial release" with your lender for properties that you sell.

We have a big decision to make -- should we sell or rent our first home?

Now the minimum standards your basement has to hit for it to be able to count as assessed sqft not estimated is a height of 7 ft, a point of egress (bilco doors) and a window usually in the rear, It's one of those things where if your going to go through the process of digging out a basement you might as well go for it and dig it deeper then 7 and closer to 8 ft so you actually stand out compared to the competition.Now the other side of this coin which I would suggest is if you're willing to spend 40-50k on a basement dig, consider adding a 3rd story addition if your a 2 story (think master suite, walk in closet, master bath) or an addition off the back and add a roof deck if your a 3 story (either master suite or just additional bedroom).

But, with a negative cash flow and student loans around 7%, the math isn't working.We are considering selling the property (probably a private sale, so no real estate commissions) and paying off the student loans.

Hi @Amily Yi-Chieh TsengI've posted an update on a good process of opening a future home.

Cities and counties are constantly updating their policies, waitlists or processes and eligibility will likely be the key ingredient to desired usage.

What does the permitting process look like and getting the zoning changed? 

If there is a value add opportunity then you get the option to pivot into a modest flip in the case you are need to sell due to regulations.Hope this helps!

Honestly, I would sell.

1. you're right in the new ones from developers don't produce any cashflow. you might want to look at the secondary market to get better yields as the properties are already built and can cashflow right away. also easier to see comparable rents in the same development. check bank repos, distressed sellers and the like. you might also want to get a parking slot for added income as they can be leased out separately. it's also quite difficult to sell without one should you decide down the road. developers usually have an in-house leasing team to handle property management which we use for some of our properties.