What It Takes To Make A Basement Apartment
Written by: Remington Joseph
While there are a lot of great ways to generate wealth through real estate investments, one of the most commonly used methods that homeowners often turn to is creating a suite out of their basement that can then be rented out. Not only is this a great way to start generating a consistent cash flow, but it can also greatly increase the value of your home if you were to decide to sell. If you decide to try this out for yourself however, there are a few things that you should know about beforehand. In order to create a legal basement suite, allowing you to get the most out of the investment, here are some of the major conditions to consider before deciding whether or not this is the right investment for you.
Keeping Everything Up To Code
In Ontario, there are a number of conditions that must be met in order for your basement suite to be considered legal. For starters, the building you’re wanting to add a basement apartment under needs to be at least five years old. In addition, you’ll need at least 145 square feet of space, and at least 1.95 meters of ceiling height. For windows, they’ll need to be at least 5% of the living floor area and 2.5% of the bedroom floor area. You’re also required to ensure that tenants have access to both hot and cold water, a kitchen, bathroom, and access to laundry.
While many of these requirements are in place to ensure that a tenant’s basic needs are met, they also exist to protect you and your property as well. For example, the requirement of having at least 30 minutes of fire separation between the basement unit and main unit could not only save lives in the event of a fire, but it could also protect your home in the event that a fire started in the basement unit. If something were to go wrong, failing to meet these conditions leaves you open to legal trouble that could cost thousands, or even lead to more severe consequences. Before even considering renting out your basement, do your homework first by making sure your unit meets ALL of the requirements necessary.
Consider The Costs
As with any remodeling project or investment, you need to consider the costs before diving in, leaving you with an unfinished unit. According to an article from RenoAssistance, t’s been recorded that on average, transforming an unfinished basement into a fully finished basement apartment can cost anywhere from $70,000 or higher. Of course, this price will vary depending on where you live, the state of your home, and the workers you hire, but regardless of those differences, you’re going to have to be prepared to put out some money in order to make this happen. Just like if you were to decide to purchase a new property, this is a major investment for your future.
A Potential Change In Your Lifestyle
Something that a lot of investors don’t think about when deciding to rent out their basement is that in one way or another, doing so is going to bring about some kind of change to their daily life. At the end of the day, you are opening your home up to a stranger, and while they may not be in your face the same way that a roommate would be, you are going to cross paths with them occasionally. The absolute privacy of your home won’t be something you’ll be able to enjoy anymore, at least not the same way that you did before. This can be especially frustrating if there isn’t great noise cancellation between your home and the basement, as you’ll probably end up hearing everything your new neighbour is doing and vice versa.
While there’s no way to completely remove this potential issue, you can minimize the impact it has on your life by carefully selecting your tenant. By thoroughly interviewing your tenants, you can handpick someone who leads a lifestyle similarly to your own, or at the very least, one that won’t intrude on how you like things. If you’re someone who really appreciates a good night’s rest, you won’t want to live above someone who is up every night, potentially bringing guests over. Save yourself the headache by carefully choosing the right tenant who you can trust not to disrupt your stability and way of life.
A basement suite is a great investment to consider if you already own a home, or if you’re currently looking to buy property. It’s a second source of income that you can easily maintain (as it’s just downstairs), and it will skyrocket the value of your home. It may seem like there are a lot of conditions, but remember that these guidelines are in place to protect you as a landlord, allowing you to get the most out of your investments.