Best Rental Income Generator in the City

• December 22nd 2011

by Shilpi Paul

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In October, UrbanTurf contributor Sarah Godfrey wrote about an intrepid home buyer who flipped the rent-the-row-house-basement paradigm upside down.

Economist Adrian Dungan had been renting a room in a Mount Pleasant group house for about a year when he came to the realization that there was a way for him to live in the same amount of space he was currently living in, maybe even more, for free. He could buy a row house, live in the basement, and fill the bedrooms with renters to offset the monthly mortgage payments.

In November 2010, Dungan and his girlfriend Nicole Aga found a five-bedroom house for sale at 1012 Park Road NW (map). The property needed a lot of work and had a completely unfinished basement, which meant that if the couple bought it, they would need to put in time and money before they were able live there or fill it with renters. Compounding this scenario was the fact that mortgage payments would start within a month of closing and contractors and materials were expensive. Still, after crunching the numbers, Dungan and Aga moved forward, purchasing the home for $585,000 in late January.

With the help of a contractor, Dungan spent all his free time for the next several months fixing up the home, and building a livable basement home for himself and Aga.

By June, he had not only finished the basement and the remainder of the work, but also found five friends who could rent out the bedrooms on the upper levels of the home. In the end, Dungan and Aga spent just over $35,000 renovating, and while he wouldn’t disclose any financial details regarding the mortgage and rent, he said that he is now income positive on the house.

More photos of Dungan and his home below.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/best_income_generator_in_the_city/4820.