Purchasing a home that has been fitted for a potential basement suite is a smart investment strategy to help offset one’s mortgage. In today’s fast movement market, having a legal suite is a way to maximize the return on the investment made when building a house.
All of our Troiwest models have the option of additional legal suites with floor plans that include one or two bedrooms, a kitchen, a living room and a bathroom.
The concept of sharing property with a tenant may seem prohibitive but the layout and design of the Troiwest legal suites makes the living arrangement comfortable for both proprietor and tenant offering separate entry and a separate heating system for the suite. While many rental suites on the market may include in-law suites or subdivided living spaces, it is sensible and wise to ensure that your suite meets legal requirements to avoid it being decommissioned. Troiwest’s legal suites are competitive in the current rental market because they meet legal requirements and are comfortable living spaces.
The investment strategy behind the legal suite development option, can be explained in the following way:
|Down Payment (5%)||$20,000||$22,500|
|Mortgage Interest rate||3.25%||3.25%|
|Monthly Mortgage Payment||$1,851.80||$2083.28|
|Rental Suite Income||$0||$1,100|
|Actual Monthly Payment||$1,851.80||$983.28|
Susan and Jill have purchased the exact same home; the only difference is that Susan has the optional basement suite. While she pays $2,500 more upfront and $200 more per month for her mortgage, she’s able to generate at least $1,100 a month from rental income, cutting her payments in half. In other words, after just six years of renting out her basement suite and making over $10,000 annually, Susan would have paid off the initial expense for the upgrade. What’s more, if Susan rented out the suite for the entire period of the mortgage at $1,100 a month, she could make $270,000, in the form of a retirement nest egg, vacation home or future investment.
The benefits of basement suite income speak for themselves. The ability to generate income from your own home as well as the natural proximity with your tenant to ensure your home is looked after, make this an appealing investment option.
Photo by Point3D Commercial Imaging Ltd. on Unsplash