Expert: Hans Weber, Licensed Broker Associate - 6/16/2008

Question
Hello,
My wife and I are looking at buying a 2 family house in Brooklyn, NY.
The current owner rents the basement (as a 3rd apt.)
My wife and I would like to rent the basement for extra income but would want to do that legally.
I understand that would require that the basement confirm with some regulations and obviously am not asking you about that (since you can't see it).
My question is - If we were able to convert this to a 3 family house - how would that affect property taxes? is there anything else that would be affected? those the house no change status and require further regulations?

thank you,

Guy


Answer
Hello Guy,

Thank you for your question.

Maximizing the income in an investment is everyone's goal.  It may be that the basement apartment is illegal and local codes may not allow for an apartment to be in the basement.  You need to check with the local municipal building department and find out what the regulations are for such space.  Even in a single family house to finish the basement as a playroom you need to have two exits to make it legal reason being for fire safety.

If you could legalize the  3rd apartment it would increase the value of the building and thence increase the taxes proportionately.  Some municipalities may require the whole house be brought to current code if it is expanded.  That could cost a lot of money.

Hope this helps you.

Hans