Calgary – 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!

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!

Suite Showcase: Silverado – A Cautionary Tale of Illegal Suites

Introduction

Braydon Randall is a young entrepreneur and investor who had been interested in investing in real estate at a young age. He was born and raised in Vancouver, and began to work in trades as a crane operator. He was working up in Fort MacMurray where he learnt from friends that Calgary was (and still is) a great city for investment properties. Braydon found that investing in Calgary homes was a lot less expensive than it was to purchase a house in his hometown of Vancouver.

In 2014, at the young age of 23 Braydon bought his first house in the SE of Calgary with the intention of adding a secondary suite to the home. The house is a 4 level split, which he found to be very simple to separate and suite. Working in the trades, Braydon had many friends with a wealth of experience which he was able to get their assistance on suiting his home.

Although Braydon worked hard to make sure his suite was well built, he took the advice from his father and decided to not go through the process of making the suite legal. This proved to be a costly mistake for Braydon as his next door neighbour invited Braydon over for a beer right as he was finishing his project and informed him that his wife and he did not feel comfortable having a renter for a neighbour.

They ended up reporting Braydon. He had to tell the renters that he had been in the house for less than a month that they would not longer be able to rent from him, and then had to go through the process of getting the city to inspect and approve all the work that was done (which is challenging and expensive once all the drywall is up). In the end, Braydon was able to get the suite up to Calgary and Alberta building codes, and now has easily one of the most beautiful legal secondary suites in the city.

Let this be a cautionary tale for all of you. When suiting your home, take the time to do it legally!

Q&A

Q: Was there anything in the process of suiting your home that was simpler than you thought it would be?

A: Nothing really comes to mind. For me the process was not an easy one as I had not originally gone down the legal route. I was really happy that I took a lot of pictures and documented the work that I was doing before hand, because I was able to use that to show the quality of the work to the city and the electrical and plumbing inspectors.

Q: What happened when you were reported for having an illegal suite?

A: A month after I met with my neighbour I got a letter in the mail saying that there is a complaint and that they are coming to do an inspection on an illegal suite. At that time I had some tenants who had been in there for about a month. They were older, in their late 60s. So I had to kick them out. I had to remove the stove, I had to remove the dryer, and that is when the process started of having to get the building permits and developer permits.

Honestly, it feels like I pretty much got black listed from the city. The contractor that I ended up getting to help me after the fact, he has been doing secondary suites for like 20 years. He said that he had never seen the city make someone jump through so many hoops. It really felt like the city was doing this just to screw with us.

Q: Do you think the city made it so challenging for you because you had originally gone down the path of doing an illegal suite?

A: 100 percent. I believe that it was because I did it illegally, and then tried to get it done legally after the fact. I have gone to investment seminars and have talked to many people, and no one has had to deal the problems that I have.

As an aside: If what Braydon is saying about the city is true, this feels like a terrible way to treat someone who is trying to turn their suite legal. The Calgary is need of more affordable housing, and they want basement suites to become legal. Making the process difficult because someone originally went down the wrong path does not feel like the appropriate way to handle the problem.

Q: If you were to do it again would you start the process of going legal in the beginning?

A: Yes. I should not have done the illegal route. Deep down I wanted to do it legally, and I had a couple people, including my own father who influenced me in making the wrong decision. Making the suite illegal and then getting caught probably ended up costing me at least an extra fifteen thousand dollars that I did not need to spend.

Q: How much did it cost you to suite your basement?

A: In the end it costed me about eighty thousand dollars. Fifteen thousand of which I probably did not need to actually spend.

Q: How much money did you put towards the down payment of your home?

A: I was living in the house, and I decided to put five percent down when I bought the home. I wanted to put the least amount of money down on the home so that I could use that money instead to renovate and put renters in so that they can pay the mortgage instead.

Q: Is your rental property profitable?

A: Yes. I get the mortgage entirely paid off, I live in Vancouver now, so ten percent goes to the property manager, and I am ending up a few hundred dollars in the green every month even after that.

Q: Are you looking to buy and suite another home in the future?

A: Yeah, I would definitely do it again. I am actually looking to buy the house two doors down when it becomes available. It is also a 4 level split. It is the only other one in the whole neighbourhood.

Conclusion

Braydon, was able to persevere through the challenges of turning his illegal suite into a legal one, and ended up all the better for it. He was able to build easily one of the most beautiful legal suites in the city, and is cash flow positive from it.