Buying a home with a legal suite can be a great way to become a Landlord and earn income to help with mortgage payments. I have some tips to help you buy a home with a legal suite that will help your financial dreams come true instead of becoming an absolute nightmare.
Choose the right neighbourhood.
Do your research. Talk to your Realtor to find out which neighbourhoods have homes with desirable legal suites. There is not much point buying a home in a neighbourhood where potential tenants are unlikely to live. Look for neighbourhoods that have easy access to transit, post-secondary schools, and areas that offer plenty of employment opportunities like downtown, business parks, or hospital campuses.
Look for a separate entrance.
It can be much more desirable to tenants and Landlords if both parties have a separate entrance into their living space.
Some homes with legal suites may already be soundproofed. If not, talk to your Realtor and learn about different soundproofing options. Although it may be an additional out of pocket cost, it is an investment you will not regret making!
Get an inspection.
Although I recommend this for every Buyer, I cannot emphasize it enough for Buyers looking to rent out a suite in their home. It is important to ensure that everything is safe and up to code. The inspector will check things like window placement and size, water drainage, electrical set up, ventilation, fire suppression measures, and more.
Talk to your accountant.
You do have to declare rental income on your tax return. You can also claim some of the expenses incurred in your role as a Landlord. Your accountant will let you know what you can claim and how to properly document your income and expenses.
Talk to your insurance company.
You will need to let your insurance company know that you are using part of your house as an income suite. This can affect your premiums and eligibility for coverage.
Make a decision about common areas.
Do you want to share the laundry room with your tenant? Are you comfortable sharing your backyard space? Think about what spaces, if any, will be accessible to both parties. Be sure to let your Realtor know what you have decided about common spaces because this information can really help to narrow down the list of suitable properties.
Talk to other Landlords.
Spend some time talking with experienced Landlords who have rented legal suites in their own homes. This is a great way to get an accurate picture of the pros and cons of having a suited home, as well as provide an opportunity to learn tips and proven tricks of the trade.
Buying a home with a legal suite can be a great way to enter the world of income properties. If you are not sure where to start, let me help you find your pathway home!