Second Suite

Choosing the Right Contractor

Choosing the right contractor to renovate your home does not need to be hard. If you take the time to follow the steps below you will be able to find a great contractor who can help you achieve your goals, and at a price that is reasonable.

But before we even get into that let’s quickly look at what a contractor does.

What does a contractor do?

The contractor meets with you to discuss your vision for a project, and then works to turn that vision into a reality. They do this by hiring the right labourers, pulling all of the permits that are needed, and organizing when each worker needs to go into the job site to make sure the work is happening as efficiently as possible. They ensure that the work is being done to a high standard and that there are not any mistakes that an untrained eye might miss.

Contractors usually make their money by charging between 10-20% of the total cost of the job (including supplies and labour). When you receive a quote from a contractor the mark-up will already be added in.

How to find contractors

The Internet

Kijiji, Craigs List, Angies List, and many other sites have pages for contractors to post ads saying that they are available for hire. Many of these pages show pictures of previous jobs that have been worked on, and you can get a basic understanding of the contractor.

There are a many great ways to find contractors, especially with the ease of the internet.

You can also google for contractors in your city and find the websites of contracting companies. Contracting companies usually charge a bit more for their work, and usually have multiple projects on the go, but they became bigger for a reason. You can be confident that when hiring a contracting company that work will be done to the quality that you want.

Referrals

This is my preferred way to find good contractors (and just workers in general). Talk to people that you know and trust about their experiences. If friends and family have not done this before, then your realtor will have suggestions that he can give.

In the last house that my wife and I built, the contractor that we ended up hiring was a referral from our home inspector (who was referred to us by our realtor).

How to select the right contractor

Get multiple quotes

This is the big one people. There is nothing more important in the entire process of finding the right contractor than this. When I was last looking for a contractor I was amazed at the variance between the cost, expertise, and quality of work between the multiple contractors that I connected with.

I would make sure that you get quotes from a minimum of 3 separate contractors. Doing this will help you learn more about them, and it may also give you other ideas on how a renovation can be done.

Ask your contractors for references from previous clients. Some questions that are worth asking are; “How close was his initial quote to the final price?”, “How accurate was the project timeline that was quoted?”, and “would you recommend this contractor to your friends?”

See if you can visit previous projects. At the very least, look at pictures of the jobs that your contractor has done.

Have they done a legal suite before?

Adding a legal suite to your home has increased regulations in comparison to building or renovating a regular home. Make sure that the contractor you are working with has worked on a legal suite, or make sure that you are well versed in the codes of your city.

Get to know the contractor

It seems kind of silly to say this, but it is really important that you like working with your contractor. You will be working alongside this person for the next few months and you will want to make sure that their working style matches your own.

How hands on do you plan on being during this project?

If you want as little involvement as possible then it is worth making sure that the person you work with is a competent informer, and is able to send you updates on the work that is being done. You need to be confident that this person is very details oriented and will hold his workers to a very high standard.

If you are a bit more like me, and enjoy visiting the site to see what is being done, and being a bit more hands on you should make sure that your contractor is ready to deal with that. Many contractors do not always enjoy having the homeowner drop by asking questions or pointing out issues (by the way, if you see issues, always point them out).

Nothing like surprise visits with the whole family

It is vital that you don’t just hire a good contractor, but that you hire a contractor that is good for you.

How many other jobs are they working on right now?

I have seen a project with a 3 month quotation turn into a 6 month reality because of contractors that are working on too many different jobs and can’t be organized enough to get them all done on time.

Ideally your project will be the only one that your contractor will be working on. The reality though is that something like a basement renovation is usually less lucrative than building an entire house, and some contractors will take on between 2-5 projects at a time.

If your contractor is taking on multiple projects, be sure that they are very organized, and look for some form of guarantee from them if they go over their quoted time.

Price isn’t everything

At the end of the day, the price is important, but not at the sacrifice of the quality of the work that is being done. The highest quote does not mean the highest quality, just like the lowest quote does not mean the work is shoddy.

Many contractors started working in a certain construction field and may be able to complete tasks on their own without hiring it out. This can save them money, and they pass those savings onto you.

Conclusion

The most important thing to take from this article is that getting multiple quotes is a must. Spend time getting to know the contractors that you are thinking you want to work with, and do your due diligence to make sure that they meet the standards that you have, and that you will survive (and maybe even enjoy) the next few months of working with them.

We hope that you have found this article helpful. As always, feel free to leave comments below, and please share this article with your friends.

Secondary Suite Utilities: Who Pays the Bills? And How Much?

One of the last decisions that many landlords of secondary suites decide on is how they should split utilities. But this is something worth thinking about before you’re about to post your suite online. Should you go 50/50? Or include it in the rent? These are great questions to ask, and there are many factors to consider. Let’s dig into what options you have, and what we recommend.

Should I Include Utilities In the Rent?

Including utilities in the rent can simplify payments between landlords and tenants. The way you would do this is think about how much rent you would like to get on a monthly basis, and then average what utilities cost over a year and add that to the price. Tenants like this because it creates consistency in how much they pay each month, and if your tenant is careful with how they use their power, then the landlord can potentially make a bit more on warmer months.

There are a few downsides to going down this route however. First, expect your utilities prices to go up, as tenants who are not responsible for how much power or water they consume will tend to use them all more freely.

Second, including utilities in the price makes your home look more expensive on renting sites. We have tried renting our properties both including utilities and separating them, and we found renters faster by not including utilities nearly every time. Rentals at lower prices on rental sites consistently get more views, which means there is more potential in finding a great renter.

Ultimately, we think that including utilities can be a good option if a landlord is looking for a simple way to charge their tenants. It does have the ability to eat into your profits and can make finding a tenant take longer. If you are willing to communicate with your tenants consistently, then there could be better options for you.

A Simple Way to Split Utilities

If you decide that you want to keep utilities separate from the rent then there are a few choices that you need to make.

Whose Name is on the Bill?

If you are living in one of the suites, then the answer to this is pretty simple. It will be under your name.

If you are renting both the upstairs and downstairs however, you can choose to have them still be in your name, or choose one of the tenants to have it in their name. If it is in the name of one of the tenants then it will be between both of the renters to work out how much they each need to pay, with money being transferred between the two parties. Alternatively you can keep the utilities in your name, and just let each tenant know how much they need to add to the rent they send you each month.

Although both options have their pros and cons, we would recommend keeping the utilities in your name. It is not too challenging to send a text at the end of the month saying how much utilities is owed and needs to be included in the rent. And instead of money exchanging hands through multiple people you are the main point on contact for a single transaction each month.

How Much Should Each Suite Pay?

You can ultimately split the utilities in whatever way you see fit. One of the ways that many consider to be most fair is to look at how much square footage each suite has, add them both together, and then divide the square footage of each suite to the total to get a percentage.

Basement (600sqf) + Main Floor (1200) = Total House (1800sqf)

Basement(600sqf)/Total House (1800sqf) = .3333 or 33%

In the example above you can see that with the calculation the basement should pay 33% or 1/3 of the utilities, and the upstairs should pay 2/3 of the utilities. When you do this in real life, you probably won’t get percentages that are quite as clean as above. We would still recommend choosing whatever is closest to a simple fraction, so 1/4, 1/3, or 1/2.

Pros and Cons

The benefits of going down this route is that as a landlord you are always getting the exact amount of rent that you excepted each month, and that the tenants are responsible for the utilities that they use. As mentioned in the utilities included section, you may also find that you can rent the suite faster as a lower cost properties on rental sites get viewed more.

The downside to this is that splitting utilities is never perfectly fair. The basement tenant may be paying less. but if he is always taking long showers, and likes to keep an electric blanket or heater on most of the day, then the upstairs tenants might be fronting a portion of what should be on his bill. It will be important that if you choose this option that you are able to foster open communication with your tenants and listen for their concerns and see what you can do to find solutions.

One Thing to Consider

While you are building your home, or legalizing it, you do have the option to contact your utilities company and have then instal a second electric and water metre. Going down this route can have a high upfront cost, but it could save you headaches in the future.

For this to happen the utilities companies would need to dig a ditch by the nearest outside wall to where your utilities room is located in your home. They would then drill a hole through the wall, install the second metre and connect it to the panels in your home. When we looked into doing this in our Nolan Hill home, we were told the cost would be between $5-10k all in. We ultimately decided that the return on investment would take too long to recoup, but it is an option that some may consider.

In Conclusion

There are many ways that you can deal with utilities for homes with secondary suites. If you are ok with potentially leaving money on the table then including utilities in the rent is easily the simplest option. Alternatively, charging for utilities outside of the rent is more accurate, and you get the same amount in rent each month, but there are a few more headaches to deal with.

Please let us know in the comments what your preferred method is, and subscribe to Second Suite to stay up to date with the best tips on legal secondary suites in Canada.

Suite Showcase: Ranchlands Calgary

Introduction

Welcome to our second Suite Showcase! In these posts, we connect with a homeowner to learn about how they added a legal secondary suite to their house and share the finished product.

This week we connected with Chris Hughes to talk about the first home that he and his wife Michelle purchased in 2012. Chris is an airline pilot and at the age of 30, he and Michelle purchased their first home with the intention of adding a legal suite to the property. Chris had been interested in investing in rental properties for a few years before he purchased their first home, and spent a few hours each week reading about property investments, and looking for homes on MLS. After about a month and a half of searching with a realtor, they were able to find their first house in Ranchlands.

The house is a 4 level split home. Chris and his wife Michelle lived on the top 2 floors of the home, and renovated the 3rd floor as the basement suite, and the 4th floor as the mechanical room and common space/shared laundry.

When they purchased the home, an illegal suite had already been started on the property (the plumbing was already completed), and Chris realized that it would not take much work to bring the suite up to code. “It’s not worth the risk to own an illegal suite. If there is a fire, you could get sued, and your life is ruined. It’s not worth a couple of bucks of rent,” said Chris. He added, “Having an illegal suite gives your tenants leverage through the fear of having them report you if they don’t get their way, and I wanted to sleep soundly at night.”

Chris had a small amount of construction experience, and decided that he would try his hand at framing, drywalling, and painting, and ended up only needing to hire an electrician and HVAC expert to support him on the project. When Chris finished a day of flying, he and his wife would work on the basement. It took 4 months of hard work, but Chris was able to finish the suite, get a final inspection approved by the city, and a renter in his basement.

The experience was so positive for them that within 18 months Chris and his wife had purchased a second home in the SE of Calgary where they also renovated the basement to add a legal suite. When I asked Chris how he could afford to do this he told me that they refinanced their first home and put 5% down, which freed up the funds to invest in a second property and renovations.

Q&A

We asked Chris a few questions about the overall suiting process:

Q: Was your plan to always suite your home?

A: My wife and I had lived in basement suites and upstairs suites before we bought our first home. I had been interested in investment properties for a while, and knew that I wanted to own a home that could provide income. My wife is a teacher and has a pension plan, but as a pilot, if I get injured and can’t fly anymore then my pension could be gone. I wanted to have a property that would be an investment for my retirement.

I spent a lot of time researching and learning about investment properties before we jumped into buying our house. My wife and I wanted to make sure that our home could be an investment for us.

Q: Were there any challenges that you were not expecting to come across when suiting your house?

A: Some of the building code requirements at the time were an extra challenge. A lot of these have become simpler recently, but there is still some confusion on a few of them. For example, the code says that there needs to be “adequate ventilation”, but what does that even mean? There were a lot of windows in the home, so I thought that maybe that would be enough, but it turns out you either need to have a separate furnace that can blow the air or if you installed baseboard heaters like me, a HRVsystem to move the air around. The only way that you could get an actual answer was by talking to an inspector directly, or calling 311.

Q: Was there anything that was simpler than you expected?

A: The whole process was simpler than I imagined it would be. Looking at the itty bitty details can seem daunting, but when I look at the big picture everything went well.

Q: Is there anything you wish that you had done differently?

A: Ultimately, time is money. I spent a lot of time working on this project and my wife did not get to see me that much while I was working downstairs. I might have hired more of it out to get the rental finished faster.

I would have liked to have lived in the basement instead of upstairs so that we could have gotten more rent.

Sound is the number one complaint that I hear about when renting a suite, and although I added soundproofing insulation and drywall, I wish that I also added resilient channels to bring the noise down even further.

Q: Would you recommend other people suite their homes?

A: Absolutely. With a few caveats however. You need to do your research first. You shouldn’t just watch a TV show or two and think that you can jump in. Spend time looking online, and take your time finding the right home. There is nothing worse than buying a home that you find out later you can not suite.

If you do not need all the space of a full house, then it is really silly not to do it. Especially when you crunch the numbers. I am breaking even on my property in Cranston, and am cash flow positive with my Ranchlands house. These homes have been a great investment.

Q: Do you have any advice that you want to give people who are interested in suiting their homes?

A: Start slow. Do your research. Head to the City of Calgarysite and read about the steps. The site does an amazing job spelling out the steps that you need to take. If you are unsure what to do next then pick up the phone and give the city a call. See if other landlords are willing to chat with you about the process. I find that most people are more than happy to share their knowledge.

A lot of people think that being a landlord can be scary. Don’t forget that you can always hire property management companies to run the suite for you, even if you live upstairs!

A cozy fireplace to stay warm during the winter months.

In Conclusion

Chris and his wife are true believers in the value of legal secondary suites. They are using their properties as long term investments, and through effective spending, were even able to purchase another home with a suite with it within 18 months. We hope that Chris’s story and experiences inspire you to follow down this path as well.

Please feel free to share your stories below, and if you have a suite that you would like showcased click the link here! We can’t wait to see what you have done!

The Best Secondary Heat Source Options for Legal Suites

One of the most important differentiators between legal and illegal suites is having a separate heat source for each of your suites. Each suite needs to have completely separate airflow from each other as well. Meaning that if a single furnace is pumping air both upstairs and downstairs, you will need cap some vents.

There are many different ways that you can provide heat and airflow to your suites. In this post we will look at some of the best options available and their pros and cons.

Forced Air Furnace

A forced air furnace is literally just adding a second furnace to your home that only feeds air to the basement suite. These furnaces have their own separate ductwork as well as ventilation to the outside. They can be either gas or electric (most being gas), and many of the new ones are high efficiency and take up less space. They would most likely be placed in the mechanical room of the house, and would feed fresh air through vents in the ceilings and walls of a basement suite.

Pros

One of the best reasons to get a furnace is that they are less expensive to operate. Gas is much less expensive than electricity is, and when you live in a city like Calgary that deals with the cold for half of the year (or sometimes more) you will be in need of heat quite often. The overall costs savings could be as much as 50% less in heating bills every year. Wow!

Furnaces also are able to heat up a suite faster than other heat sources. If you head out of town for a few days in the winter you can turn the heat down, and have your home warm up quickly when you get back home.

Cons

There is a higher upfront cost to installing a gas furnace. In comparison to electric baseboards the cost of buying and installing a furnace is between 3-5 times as much (or between $2,000-$4,500 to buy and install)

If you are looking to suite a basement that is already finished then installing a furnace will be challenging. You will either need to get lucky and be able to close off the current air vents leading to the basement and connect them to your new furnace, or tear down the ceiling drywall to install new ductwork.

Overall

If you have the space in your mechanical room, and are looking to suite an unfinished basement then installing a furnace will usually be your best bet. Although there is a higher upfront cost to installing a furnace, the money saved on utilities in the long run is pretty huge. Even if you are not the one paying the bills, you will be able to keep good tenants longer through the good value.

If you are turning an illegal suite into a legal one and are not looking to to completely re-work the home, then I would recommend looking more closely at our next option.

Electric baseboards/HRV

An electric baseboard heater sits right above the baseboards in one or more rooms of a suite and uses electricity to heat the rooms. Most of them are 100% energy efficient. They do not move air around however, and because of this they will also need a HRV (Heat Recovery Ventilation) system to allow for proper airflow in the home.

Pros

Buying and installing baseboard heaters is inexpensive. It costs between $300-$500 per heater to buy and have installed by an electrician. As an aside, it takes about 10 watts of power to heat of a square foot of a home. So If your basement suite is 800 square feet, then you would need at least 8,000 watts of power to heat your home.

If your suite is already close to finished, then this will be the simplest way to provide heat to your home. Installing an electric heater causes little disruption, and can be installed almost anywhere in the home. If you want simple then electric baseboard heaters are the way to go.

Cons

Electricity is super expensive! These baseboard heaters may be 100% efficient, but getting electricity to your home is not. Natural Resources Canada recently put out a 2016 report showing that it costs nearly twice as much to run electrical heaters every year than gas furnaces. So although you are saving in upfront costs, you or your tenants will ultimately pay in the long run.

You still need to install a HRV system in your home. Although still less costly, and potentially simpler than a furnace, this is still a costs that needs to be considered.

Overall

I would typically recommend avoiding baseboard heaters if you can. Although they are a cheap upfront cost, they end up costing more in the long run. It is easy to think they are simple to install, and forget that you still need to find a way to have proper airflow in the suite as well. Unless your suite is nearly complete I would look at other options.

Radiant heating/HRV

This is a heat source option that is not talked about as often, but it is a really interesting one! Radiant heating or in-floor heating uses either heated water or electric coils that run underneath the floors to heat your home (and your feet!).

Pros

Very little feels better than radiant heating. Instead of your bare feet freezing when they touch the cold tile or floor when you wake up they instead feel the comfy warmth of your secondary heat source.

The hydronic (water) radiant system on average costs 30% less than even a gas furnace on yearly heating bills.

Cons

They are the most expensive to install. Ranging between $6-$15 per square foot. When my wife and I looked at adding radiant heating to our Ranchlands basement suite (1,100 square feet) it would have ended up costing us over $10,000 to install.

Like the furnace, it takes some significant work to add this heat source. You have to tear up all the current flooring to install it. and then add new flooring back down. And like electric baseboards you still need to install an HRV system in your home to pass your inspection and allow for proper airflow.

Overall

Radiant heating in the long term is one of the most energy and cost efficient options for your suite. It does however come with a large upfront cost for installation which can be a deterrent for many people.

The feeling of radiant heat is really quite something however, and I would at least look at installing it in a bathroom or bedroom if you want to have a feeling of luxury.

Which Option is Best?

All of these choices have their own pros and cons. And ultimately, the right decision will depend on the home that you are working with and your budget.

I have personally found that a forced air furnace has been the right choice in all of the houses that I have suited so far. In the long run it is cost efficient, and not too much more to have installed over baseboard heating.

If money is no object, or you are looking to make a luxury suite, then I would have radiant heating installed in at least some of, if not all, of the home. It really is a wonderful heat source.

I hope that you have found this article helpful in deciding what kind of heat source is best in your secondary suite. If you enjoyed this article and want to learn more about adding a legal suite to your home subscribe to our site! We have great weekly articles to help you learn about the process and see what others are doing.