October 2018 – Second Suite

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.

Calgary Secondary Suite Planning: Where Does the Electrical Panel Need To Be?

Introduction

Electrical panels and their placement have historically been one of the biggest nuisances for homeowners with legal suites. It used to be that the electrical panel needed to be accessible by both upstairs and downstairs tenants. With most panels being originally located in mechanical rooms not accessible by both suites it was either costly to move, or made turning suites legal nearly impossible. Thankfully regulations have recently changed allowing for more flexible panel placement. In this article we will review what the new electrical panel regulations are, and what our recommendations are for electrical panel placement on new and existing homes.

The New Regulations

The City of Calgary’s secondary suite site says that “A common electrical panel can serve both units, provided there are no shared branch circuits between the suites. It is recommended the electrical panel be located in a common area, or that sub-panels be installed in each suite.” I italicized one of they key words in that quote for emphasis. This is a big change, as just a few years ago it was required to have electrical panels accessible to both suites. For you to make a suite legal you would have to either connect and add a sub-panel to the other suite, move the entire electrical panel to a common space, or get lucky and somehow have a home with a mechanical room that connects to both suites. Now, although it is great if the electrical panel is accessible in both suites, it is no longer necessary. You do want to make sure that you add a line to your leases that states that if the upstairs needs access to the electrical panel that they will have to contact the renter of the basement or landlord and that access will need to be provided within a reasonable timeframe.

Personal Examples

Our first home in Nolan Hill was planned with a second suite in mind and was built when the old regulations were in place. We had to make sure that the stairs from the upstairs lead down to the mechanical room “common space” where the electrical panel was located. It took some serious planning to make happen, but turned out nice in the end. Related: Suite Showcase: Tour Our First Suite

On the bottom right of the floor plan is the common space. Those stairs lead to the separate upstairs suite. The mechanical room in the basement is accessed through the bathroom.

In our second home in Ranchlands the mechanical room (and therefore electrical panel) is not accessible by the upstairs tenant. We currently live in the basement, so if upstairs needed access they would text us and we can flip a switch for them immediately. Extra planning does have to come into play if we are out of town or on vacation however. So be careful about the added responsibilities of going down this route.

Where Should I Put My Panel?

The answer, like most, is that it depends on your space.

New Homes

If you are building a house new and are planning on adding a suite, then I would highly recommend that you look for a way to put the panel in a common space. It will cause the least amount of future headaches. If there is not common space, then a sub-panel is a great (but slightly more costly) alternative. Related: The Top 3 Requirements for Adding a Legal Basement Suite to Your Home

Existing Homes

When you are suiting a home that already has an electrical panel installed that is not easily accessible by the other suite I would recommend looking at what it costs to get it moved. If the drywall is already up, then that usually means it will be too pricy for most, but it is always worth checking out first. If the cost is too high, then know that you have the option to still legally suite the home without giving the upstairs immediate access to the panel. But make sure that you have a way to allow the other suite a way to switch a breaker within a reasonable time. I am not a lawyer, so make sure that you talk with one to keep your lease on the up-and-up.

Related: The Hidden Costs of Investment Properties

Conclusion

Whether in a new home, or existing one, ideally you would want to have a home with an electrical panel accessible to both suites. Fortunately, this is no longer required however, meaning that more homes than ever have the ability to turn their existing suites into legal ones, or add entirely new legal suites altogether. Make sure that you talk to the electrical inspector about panel placement if you have any further questions Thank you for reading our article. Make sure that you subscribe to our site to learn even more on how to legally suite your home.

Calgary Hits 1,000 Legal Secondary Suites

Secondary Suites are Growing

The City of Calgary announced on October 4th that there are now more than 1,000 legal secondary suites. This number is more than doubled the 458 legal suites (of which we were one of) in 2015. And since the changes announced in march has grown another 25%.

The city has created a video celebrating the milestone, as well as encouraging current illegal suite home owners to suite their houses. Hopefully the process is simpler now than it was for our first Suite Showcase homeowner Braydon.

The City of Calgary’s 1000 Suite video

But is it Enough?

In short, no. The city of Edmonton has over 3 times as many legal suites, and Calgary has 300,000 more people living in the city. Vancouver and Toronto do not have an available suite registry, but it is safe to assume their legal suites numbers are as woeful as Calgary’s.

Although 1,000 suites is a good start, Calgary is a long ways away from achieving it’s goals of finding affordable housing for all Calgarians who want it.

Fortunately, Calgary is continuing to promote secondary suites by waiving the development permit and secondary suite registry fees until June 1, 2020, saving Calgarians up to $700. If you are currently interested in legalizing a suite, the time could not be better for you.

The City of Calgary has a simple site to use to apply for suites, and learn the basics about suiting your home at calgary.ca/suites.

Of course, if you want to make your goal of suiting a home a reality, subscribe to Second Suite by putting your e-mail in the bar on the right to learn about the process, and see how other’s have done it as well.

Thanks for reading!