While renting out an income suite has its definite benefits, it may not for everyone.

You’re looking for alternative revenue streams to help you pay off your mortgage or to provide cushion in the unfortunate event that you or your significant other becomes unemployed. What do you do? Renting out an existing income suite (also referred to as secondary suites) or building one is an option that many family are looking into since Toronto condominiums are going for such high prices.

What seems to be an easy extra revenue stream actually has a lot of responsibility pinned to it. In fact, becoming a landlord is much like taking on an additional part-time job. Check out these tips for building/upgrading your income suite so it is move-in ready, and other tips for prospective landlords.

CMHC’s page on Permitting Secondary Suites will be a helpful resources to refer to for those thinking about becoming a landlord.

 

What is a Secondary Suite?

CMHC defines the secondary suite (often referred to as a income suites, “second units, accessory apartments, granny flats, in-law suites and basement apartments”) as “a private, self-contained unit within an existing dwelling”. The income suite has its own kitchen, bathroom, living, and sleeping spaces, but the tenant could have access to shared areas to parts of the principal dwelling such as: backyard, laundry room, or driveway.

Here are some examples of how the secondary suite can take form (from the Regional District of Nanaimo):

what1

 

Building the Unit

Like any other property, you are required to comply with all zoning regulations and building codes. If you’re building your secondary suite as an addition outwards of your home, this is especially important to ensure you remain compliant with the zoning by-laws. For the rental property itself, you must make sure you meet: property standards, occupancy standards, health & safety requirements, and fire and electrical code. Second Suites’ Information Guide for Homeowners has very detailed information on being compliant while upgrading or building a rental suite. Refer to page 12 for a list of additional resources to become more informed.

BUILDING

 

Creating Separation

While you may be comfortable with a tenant sharing your property, you’ll still want to maintain separation between the principal dwelling and secondary suite so both parties feel their privacy is not being compromised. You’ll want to invest into sound proofing to create a barrier between the two living areas. It is also required to create separate entrances into each living area. This will allow both you and the tenant to enter your respective living areas without encroaching on each others space or disturbing anyone.

SEPARATION

 

Function over Aesthetics

When you’re planning the interior design of your income suite, it is better to opt for high-quality, functional pieces, rather than high-design pieces. You don’t know what your tenant’s tastes will reflect, so it is better to play it safer and choose appliances, bathroom and kitchen fixtures, and light fixtures that are universally appealing and high-quality. You should not be blowing lots of money on preparing the income suite (no more than 2 years of rent), but this doesn’t mean avoid high-quality pieces. High quality means less chance of you having to go in to fix these features when they malfunction.

FUNCTION

 

The Ontario Tenant Protection Act

Ontario’s Tenant Protection Act governs the relationship between landlord and tenant. Familiarize yourself with this document to understand the rights of both yourself and the tenant. Your number one responsibility in your relationship with the tenant is to provide a safe and habitable place for them to live. Ensure your contracts fall in line with the regulations of the act to set your relationship up for success.

tenant

 

Cover Your Bases

With opening yourself up to more legal responsibility, you must make sure you’ve done your research to protect yourself. It’s also a good idea to learn from other landlords and seek guidance to both make sure you’re cut out for being a landlord, and to learn from past misfortunes and successes.

Contact your insurance company to inform them that you now have a tenant on your property in order to ensure your policy remains valid or goes through the appropriate changes.

Finally, the way you pay your income and property taxes will change when you have a tenant on your property because of the rental income that you will bring in. Do your research to avoid any complications along the way.

COVER

 

Finding a Tenant

A lot of people underestimate the difficulty in finding the right tenant. Roma Luciw, from the Globe and Mail, offers up two suggestions: First, avoid renting out to family because any issues that may arise could compromise your relationship. Second, do not be the lowest price in the market because you will attract the type of renter that only cares about price. When your tenant only cares about price, this means a short term arrangement. Consult a real estate agent to help target your search and provide guidance.

find

 

Have you ever served as a landlord to a tenant of a secondary suite? What tips would you suggest for future landlords?

The Greater Toronto Builders team has a network of professionals to take care of your project from concept to completion. Contact us today hear more about how our project design consultants can help you or to book a free consultation contact us at 647 35 BUILD or email us at hello@greatertorontobuilders.com

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Image Sources:

Feature Image http://intentionallysmall.com/tag/chapel-hill-basement-apartment/ 

What is a Secondary Suite?

  • http://www.rdn.bc.ca/cms.asp?wpID=3040

Building the Unit

Creating Separation

Function over Aesthetics

The Ontario Tenant Protection Act

  • http://nklegalservices.com/?page_id=152

Cover Your Bases

Finding a Tenant

  • http://www.telegraph.co.uk/finance/property/property-club/10515860/best-tenants-online.html

 

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