2 or 3 bedroom that is the question

[rymac]

Hi,

I`m looking for some advise.

I`m looking at putting in a basement suite in one of my properties to increase the cash flow.

I`ve looked at the building code and I can fit 3 bedrooms downstairs but it would sacrifice a decent sized living room.

What would better for business? a cramped three bedroom or a more appealing 2 bedroom, for ease of rent and rental income.

I also noticed that 3 bedrooms have a higher vacancy rate? Anyone find this to be true.

Cheers,

Ryan

 

[GarthChapman]

Generally a 2-bedroom is easier to rent and also allows for much larger rooms and normally a much better layout. Check out whether you will be creating a Zoning Bylaw problem for yourself by adding a suite.

 

[Thomas Beyer]

QUOTE (rymac @ Jun 27 2008, 07:59 AM) Hi,

I`m looking for some advise.

I`m looking at putting in a basement suite in one of my properties to increase the cash flow.

I`ve looked at the building code and I can fit 3 bedrooms downstairs but it would sacrifice a decent sized living room.

What would better for business? a cramped three bedroom or a more appealing 2 bedroom, for ease of rent and rental income.

I also noticed that 3 bedrooms have a higher vacancy rate? Anyone find this to be true.

Cheers,

Ryan
2BR .. as with 3BR you will likely have more people ..

some cities are more tolerant about basement suites than others .. and most are required to act if someone complains due to parking issues, noise, dirt, strange smoke, crowding etc. .. so be advised that a (likely illegal) basement carries an element of risk .. and that tenant selection has to be done extra carefully ..

 

[seanverret]

Two of the biggest things with basement suites you`ll have to deal with is noise (between up and down) and parking. The less people downstairs the better. With two bedrooms, you`ll typically get a couple or two room mates. With three bedrooms, you`re looking at students, sometimes all with vehicles and sometimes with others who come over etc. The larger living room is nice, especially if you can light it up well.

Just my 2 cents.

 

[RedlineBrett]

I`d stick with three bedrooms up and two bedrooms down.

Also - you may want to consider lowering your rent to slightly below market on the basement suite to give yourself a much wider pool of tenants to pick from. Take a month of vacancy down there to give yourself time to get a good sample size. They will have to be able to work with the upstairs tenant or you will have issues. I would take 900/mo from a quiet computer addict vs. 1100/mo from a social couple any day of the week.

Some other tips

- only do pets if both tenants are ok with them or have them themselves
- make sure they are both in agreement on shared utilities
- make sure they understand the parking situation. NEVER in front of someone elses house!
- it can help a lot if the neighbors are also tenants rather than homeowners.. buy your properties carefully!
- make sure you let all of the neighbors know that you are a PRO (give them your card and everything, great chance for you to network.. maybe another JV!) and that any problems with this property should be directed to YOU or your EXCELLENT property manager.

Good luck!

QUOTE (seanverret @ Jun 30 2008, 09:27 PM) Two of the biggest things with basement suites you`ll have to deal with is noise (between up and down) and parking. The less people downstairs the better. With two bedrooms, you`ll typically get a couple or two room mates. With three bedrooms, you`re looking at students, sometimes all with vehicles and sometimes with others who come over etc. The larger living room is nice, especially if you can light it up well.

Just my 2 cents.