If you’ve recently purchased a home with an unfinished basement, you and your spouse may be faced with several options — leaving the basement as-is and using it for storage, creating a family rec room or “man cave,” or investing in a total remodel to install a separate living unit for your parents or in-laws. With more and more Americans entering the “sandwich generation,” caring for aging parents and minor children at the same time, having what is essentially an assisted-living unit in your home can be a financially sound idea for some. Read on for some of the factors you’ll want to consider when deciding to invest in an in-law unit.
Are the lifestyle and financial benefits of an in-law unit worthwhile?
Having your parent living in your home — but with a separate kitchen, bathing, and sleeping area to ensure privacy — can provide a number of lifestyle benefits. Your parent may be able to provide child care services or even cook for the entire family on a busy night. You’ll be able to easily and conveniently transport your parent to doctor’s appointments, ensure he or she is eating and sleeping enough, and feel like a more cohesive family unit.
The cost to fashion an unfinished basement into a legal separate living unit will likely be in the $30,000 to $50,000 range. Meanwhile, residence at an assisted living facility can run around $42,000 per year (with regular 4 percent increases), meaning that your basement remodel will essentially have paid for itself if your parent lives with you for more than a year. Depending upon your parent’s financial situation, he or she may opt to carve out the cost of this remodel in his or her will, ensuring that you’ll be fully repaid upon your parent’s death, or even pay you fair market value rental rates for residing in your home.
Will you want (or be able) to rent this unit out?
If your plans to move in a parent fall through, or if your parent quickly needs more care than you can provide on your own, you may be able to generate some regular income by renting out this unit to tenants who simply need a place to eat and sleep or who can provide caregiving services to your parent. However, if the idea of opening up your home to strangers makes you uncomfortable, you may want to reconsider the remodel. At some point, particularly after your children move out and your parents pass away, living in a home with two separate living units may prove more expensive and time-consuming than you wish.
If you have more questions about basement remodeling, contact a company like Property Service Agency LLC.