In 2014 my wife Dayna and I made a big decision and turned our first home into a legal secondary suite in Calgary, Alberta, Canada. Why did we do it? And why should you do it as well?
Below we will take a look at the Top 3 Reasons why you should look into suiting your house.
1. It’s a Great Way to Enter the Housing Market
The cost of purchasing a house in larger cities in Canada continues to rise each year. According to the Canadian Real Estate Association the average cost of a home has increase from 230k in 2007 to nearly 500k in 2018! For those wanting to get into the housing market, building a secondary suite can help supplement (or even entirely pay for) the mortgage. Now owning a home and paying a mortgage is far less daunting.
Before Dayna and I purchased our first home we were living in a legal basement suite that we rented for about $950 a month. Once we bought our house, our mortgage payment was around $2,400 a month (with a 5% down first time home owners loan). Yikes, that is a pretty big (and for many impossible) jump! With a secondary suite, we were able to rent the upstairs of our house (we chose to live in the smaller basement suite) for $1,850 a month. Now our portion of the mortgage was only $550 each month. The best part? The rent we received each month went towards building the equity of our home.
2. You Are Looking for a Reliable Long Term Investment
One thing that Second Suite will not talk much about is house flipping. If that is what you are interested in doing then we might recommend following a different blog.
Owning a secondary suite is a safe and reliable way to generate a (fairly) hassle free second income. Having someone else help pay your mortgage helps you gain equity in your home. Then, once the house is completely paid off, the rent keeps coming in! For each suite you own, you will be bringing in $9,600-$20,400 of revenue a year. All you need to do is check in every few months, take care of the general maintenance and upkeep of owning a home, and deposit the cheques.
If you decide that you want to sell the house in the future, you will receive the windfall of a fully paid off house that your renters paid for you! Thanks guys!
3. You are Filling a Community Need
Although the main reason most people decide to build secondary suites is because of the fantastic investment opportunities it provides, there is a more altruistic way of looking at it as well.
The largest cities in Canada have a desperate need for affordable living situations (I’m looking at you Vancouver and Toronto). By creating a secondary suite, you are providing a new home for a person, couple, or family who needs it. You can help bring more vibrancy to your community, and help your city grow!
Dayna and I have really enjoyed getting to know all of our renters, and we feel like our lives are more enriched by being a supporter of theirs. We have rented to immigrants from India, Lebanon and England. We have also rented to a hilarious young couple who game all day, and a family in the process of adopting and caring for two children with Fetal Alcohol Syndrome. One of my most recent renters shared his tremendous weight loss journey with me, and gave me some exercises that I could do at home to get in shape too (I have a long ways to go). This is honestly my favourite part of the whole thing. It is so rewarding to be a part of other peoples lives.
In Conclusion
I would highly recommend that you look into investing in a secondary suite. It’s great for new home owners, it’s great for investors, and it makes a difference in your community.
Please share your secondary suite stories with us, we would love to showcase them on the site! And continue to follow us to learn all about what it takes to create and rent your own suite!