Renting Out a Basement Suite
Thursday Oct 08th, 2020
Tips for adding a Basement Suite
Owning a home is expensive, but it is also a great investment that allows you to build equity and once paid off, allow you to live mortgage and rent free. Building a basement suite can allow you to pay your mortgage off faster or make your monthly payment much less expensive. The problem is, most people don’t know where to start when it come to finding the right property that functions as a home and rental property. The following tips will help you find the perfect property that will meet your current needs and maintain value in the long term.
Location, Location, Location.
When looking for a property that will have a basement suite, the first thing you should consider is location. Direct your property search for locations that are within walking distance to public transit and hospitals, universities or other public institutions. Rental units in these areas bring higher value and they will always be in high demand. When looking for a property, it is also important to be aware of the zoning. Look for residential zoning that allows secondary suites so you do not have any issues making your suite legal.
Choosing the right style of home for your basement suite is also very important. There are a few architectural styles that make creating a separate basement suite an easy process. Walk-out basement properties are the easiest option to turn into a secondary suite. They are generally in newer homes and have large bright spaces, however, they tend to be a little further outside the city core, making the location less desirable to some renters. Split level homes also work well for basement rental suites and tend to be in slightly older neighbourhoods. Look for a property that has a third level entrance and large windows. In order to make your suite legal you will need an exterior exit and the bedroom must have large enough windows to be used as an emergency exit. The third option is to find a property with a back or side door that can be used as a private entrance for your basement suite. These types of properties tend to be older bungalows that have a large main floor but a less developed basement. There may be extra costs associated with adding larger windows and the rental may be less desirable due to smaller windows and a lower ceilings.
Depending on your budget there are lots of properties that can be turned into legal basement suites. There are some things you should be looking for to lower your renovation costs. Here are a few questions to consider:
1. What height are the ceilings? Look for a property that has high basement ceilings. There is not much you can do if the ceiling is too low, which is more common in older homes. While you can still make a basement suite with lower ceilings, it may not be as desirable or bring in the same rent value.
2. Does the basement have a rough-in for a washroom/kitchen? A lot of newer properties have rough-ins already installed, but older neighbourhoods may not. It can be expensive to install new plumbing in a basement, especially in older homes that may require repairs to existing services once you start working.
3. What electrical currently exists? A lot of older properties have electrical panels that may not support the extra usage from a rental suite. Make sure you are fully aware of the house wiring and the panel size when you are making your purchase. Depending on your budget, picking a home with knob and tube wiring may be a smart purchase as you will likely be renovating the space anyway. Make sure you have worked these costs into your budget.
4. Does the home have an existing legal basement suite? If you want the extra income from a secondary suite but don’t feel comfortable with creating one, look for a property that already has a legal suite. Although a legal suite will add to the cost of a home, it is well worth it. The good news is that legal suites tend to be popular in desirable rental neighbourhoods and can be found on the market regularly.
Renting out a portion of your home is not the best option for every buyer. Make sure you think about all the issues surrounding having a rental space and the responsibilities you will have. For those interested, it is an excellent way to bring in extra income that can go towards expenses or paying off your mortgage faster. Talk to your real estate agent about your goals and they can help you select a home that will fit your needs.