Rent out your basement and you could offset at least half of your monthly mortgage. The extra money could put your dream home within reach. It could also help to keep you in your home if you signed an adjustable rate mortgage and rising interest rates have increased your monthly mortgage. But, are you ready to be a landlord? Factors to consider before you rent out your basement Are you ready to share your home with strangers? This may be the most important question to ask yourself before you advertise for renters. Sure. You'll come to know tenants over time, but you're taking a chance at the start. If you're ready to rent out your basement, familiarize yourself with area renter laws. Local licensing agencies should be able to tell you whether or not your basement is up to code and meets city requirements. Things that you may need to consider include whether or not your basement is finished, has an emergency exit, a bathroom, bedroom, sufficient lighting, windows and proper insulation. A separate heating and cooling source are generally required should you rent out your basement. Again, consult local licensing agencies. Once your basement is up to code, start to think about what you'd want in an apartment that you were renting and living in. Offer an attractive living space You want your basement rental to be desirable to renters. You also want the space to successfully compete with area apartments. Decide if you'll allow tenants to park in your driveway or ask that they park on the street. If you build windows, partitions and separate rooms with doors in the basement, pay attention to the types of windows and doors that you install. Are you going to go with double hung or casement windows? Door types to consider include wood, steel and fiberglass doors. Features range from trim, sidelights and finishing to colors and transoms. Get to know potential renters Perhaps even more important than ensuring that your finished basement is up to local code, is renting to the right tenants. Definitely get a thorough background check on potential renters. Check criminal, financial and other court records. If you have children, ask yourself if you prefer to wait until they are older before you rent out your basement. Also, interview people who want to rent with you. Make sure that you communicate well and that your personalities gel. Decide if you want to rent to tenants who have pets, and, if so, what types and size of pets would you allow inside the basement? This information goes both ways. Let renters know if you have pets, as some people do not want to live near dogs, cats or other animals. Set legal boundaries. Let tenants know if you they can or cannot blast their music or television and if tenants are allowed to have visitors stay with them for days at a time. Be clear about whether you will allow tenants to have pets, and, if so, which types of pets. Determine what the monthly rent will be. Consider consulting with an attorney to draft a rental agreement. Items to include in a rental agreement are the legal names of occupants, whether trash, sewage and utilities are included in the rent and when you will walk through and check the basement. Some cities require you to give tenants no less than a 24 hour notice before you enter a rental space. Be prepared to make repairs, as needed. You don't have to make repairs yourself. However, it is advisable that you a reputable repair professional's contact information.