The Income Suite.
There is a growing trend amongst middle-income families to substitute their income when it comes to paying down the mortgage of their home. The process of designing, building or converting a space in your home is fast becoming a viable and attractive proposition to keep both mortgage and financial affairs in a healthy state; as well as giving you the opportunity to potentially increase the value of home and property.
What exactly does the process of converting your residential property to an income property entail?
Your initial thoughts around the project will obviously be based on how much you are willing to invest. Experts’ state that homeowners need to consider what rent they will charge, and calculate the cost so as not to exceed what they would earn over a two-year period. Decide how large an investment you wish to make to your home, based on whether you are converting your basement, your garage, adding a floor above you, or a separate building.
Armed with this information, you can now approach your local municipal office to establish the legality of your proposed suite. Are there any restrictions in your neighbourhood and regarding your neighbours? These are some of the questions you need to ask, as well as if there will be a difference to your insurance policy; and will your mortgage company approve of this change of status from primary residential to income?
Bring in a designer/contractor to give you an estimate. Have a detailed discussion about a functional yet appealing design, attractive enough to have renters interested and keen to stay in your home.
- What are the costs to build your income suite to the same standards as the rest of your house? Perhaps you might splurge on kitchen appliances or granite countertops – fancier bathroom fixtures and sink/s.
- Do you need a fire and sound barrier?
- Is your basement ceiling height 7’ or higher, and what would it take to raise the basement to an appropriate height?
- Do you require additional ventilation in your suite?
- Is the lighting sufficient in your basement, and how could you make it brighter?
- Is there enough room to have a four-piece bathroom instead of a three piece?
- What energy efficient lighting, low-flow toilets and appliances will you put in?
- Is there enough room to create a separate laundry, or does the laundry become part of a common area to be shared?
- Do you have enough parking spaces?
- Will you share your backyard?
- Do you put in a separate meter for the utilities?
- How will the bills and utilities be shared, and when will they be paid?
- Will you insist on quiet hours?
Having a family or tenant in your home might be an adjustment for you and your family.
Ensure everyone is on side and in agreement with these new arrangements. Do your family dynamics require whether you will choose female or male renters, a young family, or a single person? Choose your tenants wisely. Screen your prospective renters and ask for reference checks available for you to follow up on. Make sure you feel comfortable with the new tenants, and that you and your family are fully prepared to now share your home.