Do you have more house than you need? Looking to turn that extra space into a cash flowing income property? Adding a secondary suite to your home can bring value to your home and go a long way to helping you live your life on your terms.
Converting your home into an income property can be a great move. Sometimes the income property market is limited and the best place to invest is your own home. It can increase cash flow in the short term, and also increase the properties appreciation in the future. Before you go ahead and convert your property, check out how changing the use of your home could effect your taxes.
What are Secondary Suites?
A secondary suite is a private, self-contained unit within an existing dwelling. They are also referred to as second units, accessory apartments, in-law suites, or basement apartments. A secondary suite has its own bathroom, kitchen, living room, and typically has 1 to 2 bathrooms. They can share a number of features with the rest of the house, which can include a yard, parking area/driveway, and laundry.
Step 1: Plan Your Project
There are many things you need to consider when looking at converting your personal property into an income property. As with any investment property, you have to look if your home is going to be a good fit for a rental suite. What amenities are near by? What kind of cash flow can you expect from the proposed unit?
Who are you looking to rent to? If it’s students, is the school/bus route near by? Will you be able to get the unit ready in time for the upcoming school year?
Here are a few things to keep in mind when you’re looking to add a secondary unit to your property:
Each city has their own set of requirements so it is important to be familiar with these before you even start. The first thing you want to investigate when you’re considering adding a second unit to your house is to make sure you are properly zoned, approved, and have the proper construction permits. You can’t add a secondary unit to every property so make sure your home meets the criteria.
If your house is approved for a secondary unit, hiring a reputable contractor to help with the design and construction in accordance to the City’s guidelines is a good course of action for most investors.
Step 2: Submit your application for a permit
Once your project design is complete you will submit a drawing along with the necessary application paperwork to the City.
Step 3: Approval Process
At this stage a site examiner reviews the drawings for any deficiencies and determines whether more info is necessary.
Step 4: Permit Issued
Construction can’t begin until a permit has been issued making this a critical step. Getting the permit issued gives you the green light to go ahead with the work. This is when you get the satisfaction of seeing real progress being made.
Step 5: Inspections
Your job isn’t done at the end of construction. You will need an inspection first. Once your inspection is passed the permit will be considered complete. Once you’ve passed inspections you have yourself a legal secondary unit in your house. Congratulations, now it’s time to market and fill your brand new suite.
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