HGTV Income Property – Flaw

    I have been watching this show for a while. Really enjoy the work these people do. The income property crew does a great renovation job to a lot of basements and guest houses (think I saw a guest house episode, if not, should). Watching this show always gives me ideas or motivates me somehow to do something. Anything.
    I am currently watching an episode titles “single Dad’s Solution”. In this one they offer the home owner two solutions. Both solutions cost $25000. Solution A is an income of $700 a month income to the owner. Solution B is $850 a month to the home owner. Knocking that much off the mortgage. Well that is how the crew sold the idea to the home owner.
    After a bit of math, It does not add up.
    It would take 35.7 payments to equal $25000. This would be 2.9 years of renting out that space. Lots of damage and wear can happen in 2.9 years.
    At 850 a month it would take 2.45 years of payments to cover the original $25000. And again, lots of damage and wear and tear can happen in 2.4 years.
    On the plus size size they increased the value of the property by 35%
    On the downside, the home owner is out $25000 for almost three years. and when the downstairs apartment is paid for, they will have to renovate again. So far, no profit is made. and with in two years, the downstairs will be outdated and ready for an upgrade. Renovations and repairs we can estimate $2000 – $7000.
    Now there is no telling what kind of person will be living in this space. and there is no telling how long it will be before there is a renter.

    1 Comment

    1. Laura | |

      I love seeing great contractors and designers at work, however: What about mold and mildew conditions in these basement just for the sake of creating more income for the owners? Also, the Tiny windows that Not even a small child escape in a fire? No Second Exit? More people will come dh sever health conditions and even SIDS in babies is being linked to mold and mildew.
      One word, irrisponsable. The contractor hosting this show states he’s in Student rentals, would you want your kids sick or in a fire pit?

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