Living in a hot real estate market leaves homeowners looking for extra ways to capitalize on their investments. In British Columbia, upwards of 25% of homeowners of detached homes have rental suites - the highest percentage across Canada. In Vancouver specifically, this number rises to about 40%.
In 2019, building codes in BC were adapted to expand options for homeowners in multi-family buildings. Size restrictions were also made more flexible, removing minimum square footage requirements for secondary suites, making it easier than ever for homeowners to add an additional income stream with a basement kitchen renovation, basement upgrade, or basement ensuite remodel.
Although adding a secondary suite might seem like an easy choice, considering the following details is key to making the right decision for you.
Keep it up to code
Hiring a general contractor to renovate your basement suite not only ensures that your renovation looks the part, but also takes the guess-work out of keeping it up to code. Secondary suites have many regulations to abide by in order to be authorized and legally rented out, meaning that delays in meeting code standards will delay your rental income. Saving money by DIY-ing may seem like an economical choice, but losing months of rent from tenants in the event of code discrepancies may even out the costs.
Consider the ROI
Basement suites increase the value of your home, with a return on investment of about 70%. Not only will this increase your sale price, but in a housing market like the lower mainland, it could be immediately supplemented with rental income. With vacancy rates fluctuating just above 1%, filling a secondary suite isn’t likely to be an issue! Consider the current housing market, the area in which you live and the average rent similar suites earn - in addition to increased sale prices - when you consider the worth of your secondary suite investment.
Are you landlord material?
The burning question to ask yourself before you make the decision to add a rental suite - is whether you’re equipped to be a landlord, and able to sustain that position for long enough to make your investment worthwhile. Marketing your rental, finding the right tenants, enforcing boundaries, and being responsible for repairs are a few of the many responsibilities of a new landlord. Although not always a walk in the park, being comfortable in this position is a direct route to capitalizing on your renovation investment.
Have questions about renovating a secondary or basement space? Let us know, we’re happy to help.
