Does the idea of living in Toronto appeal to you? Each month, more and more new residents are attracted to the dynamic lifestyle, natural beauty, and unlimited opportunities you can only find in Canada’s biggest city. That also means real estate prices tend to be more expensive than elsewhere. Even so, that’s a problem that the right buyer can solve with a little creativity.
For some homeowners. this means building a secondary suite or searching for a house that already has one. What does this mean, and how can it make owning a Toronto home more affordable? In this post, we’ll explore your many options.
A House Within a House
In its most simple terms, a secondary suite can best be described as a house within a house. With two completely separate living units, multiple families can live together under one roof. This can come with a long list of benefits, especially when moving in with someone you know well.
Each resident can enjoy their privacy while never actually being alone. However, the main benefit is how much more affordable owning a Toronto house becomes. It’s not just that the monthly rental income covers a large part of the mortgage, but many lenders will also approve a higher amount for a property with income potential. These types of living space can take numerous forms, including:
- A legal basement suite under the main house. The days of dark, dingy basement apartments are mostly behind us. Many units in the current market are bright, modern, and spacious, with open floor plans, and sometimes a walkout to the backyard.
- An attic suite in the upper level. For those who can’t stomach the thought of living underground, a second or even third level apartment can be the answer.
- A ground floor suite on the same level as the primary dwelling. These are ideal in-law suites, especially for a family member who may have mobility issues.
- A garden suite or laneway house. These are completely separate units that are detached from the main house. They provide the best possible noise control and maximum privacy. It feels like having the house completely to yourself – because you do.
Want some other ways to boost the value and your enjoyment of your Toronto home? Look no further than the posts below:
- A Complete Guide to Home Renovations in Toronto
- Fabulous Lighting – Illuminate Your Home on Any Budget
- 5 Toronto Furniture Stores To Give Your Home A Makeover
What Are the Legal Requirements?
With the provincial “More Houses Built Faster Act” allowing up to three residential units on a single lot, why stop at just two? One extra unit alone can make your mortgage payments far less burdensome. Two would go even further, perhaps even resulting in a surplus on income versus expenses.
Of course, you will have to crunch the numbers and perform extensive research to know how much you’d have to invest compared to how much income you could generate. In addition, you’d have to decide if being a landlord is the right move for you. But just imagining the possibilities makes the thought of home ownership seem more feasible!
Toronto has numerous rental units that fall short of what would be considered “legal.” They’re faster and less expensive to set up. However, this could lead to trouble, including some steep financial penalties if someone were to report you.
Building a secondary suite up to code protects you from legal issues, as well as making it easier to obtain home insurance. Here are just a few requirements to be aware of, whether you plan to build a secondary suite or purchase a property with an existing unit:
- A separate entranceway and sufficient lighting
- The primary dwelling a semi-detached or detached house that is five years or older
- A self-contained kitchen and bathroom in the secondary dwelling
- A minimum 145 square footage
- Ceiling heights of at least 1.95 metres
- Hot and cold water supply
- Access to laundry facilities, either shared or private
- At least 30 minutes of fire separation
A secondary suite can really add value when selling a home in Toronto. For some other ideas on maximizing your results, check out the posts below:
- Is Staging Your House to Sell Still a Good Idea?
- Selling for Top Dollar in Toronto as the Market Shifts
- Selling Your Home? Here’s How to Maximize its Value in Any Market
The Drawbacks of Secondary Suites
So far, we’ve talked extensively about the perks of having one or more extra residential units in your primary residence. The financial and emotional benefits can make your venture well worthwhile, if you find tenants who are a great fit. Like any significant investment, there are also risks and downsides to consider.
- First and foremost, not everyone has what it takes to be a landlord. To succeed, you must be tough but fair, and capable of navigating a system of rules that isn’t always in your favour.
- Though you will have a vast number of tenants to choose from in Toronto’s high demand market, it isn’t always easy to find someone who is the right fit. Vetting each prospective tenant carefully and a clear rental agreement are essential.
- There is a significant financial investment in constructing a secondary suite before you can begin generating income. You’ll need to ensure you have enough funds to get through the construction stage.
- Renting out part of your home means a loss of privacy and autonomy to a certain extent. Though you each have separate units, each party will have to be considerate in terms of noise and shared outdoor spaces. Noise proofing can help, but it is an additional expense.
Troubleshoot Before You Begin
The best way to overcome any challenges that arise from secondary suites is to eliminate them before they arise. Careful planning is the key, as well as professional guidance from a local real estate expert, preferably one with investment expertise.
A strategic investment in a prime location and with the right tenant can make owning a home in Toronto more attainable than you realize. It certainly doesn’t hurt to investigate your options in more detail, whatever you decide!
Do you want to know more about the potential of secondary suites in Toronto? We are happy to provide the guidance and expertise you need. Reach out to 416.443.0300 or email Erica@EricaReddy.com for more information.
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