Buying First home with basement suite. Seeking advice!

[JasonJ03]

Hello

I am hoping to obtain as much information as I can in regards to purchasing a home with a basement suite for rental. I am planning on living upstairs. I will be buying in Edmonton or St. Albert. In the next few months I will be researching as much as I can and hopefully I will be ready to make a final decision and buy a place. I came across this site and now I am seeking advice and tips from people with experience. I appreciate any input you have.

Thank you

 

[Sherilynn]

That is a really big question.



My best tip is to buy a property with a legal suite, or one that could easily be legalized. That way the City can never make you remove it.



You may want to consider joining REIN as you will get a lot more information if you network with people than by posting in forums.

 

[Thomas Beyer]

Most suites (99%+) are not legal. Thus, getting a legal suite is not required. Ensure there is enough parking for 2 additional cars, thus 4 in total on the property, or right in front of the house.



Ensure there is a second, usually side entrance and enough insulation to the upper floor.



Ideally the basement suite has 2BR and a large window at least 50% above ground.



Buy a house close to the upcoming West LRT as you will get a nice equity pop when they finally build it. More info on the West LRT (coming within 1km of one of our apartment buildings) here: http://www.edmonton.ca/transportation/ets/lrt_projects/west-lrt.aspx

 

[Sherilynn]

I don't agree that 99% of suites are illegal; but regardless, I would still research the requirements for legalizing a suite, and buy a property that you think could easily be legalized.



If someone (a neighbour, an evicted tenant) complains about an illegal suite, the City MUST inspect it. At that point, the owner has a very limited time to either legalize the suite or decommission it.



I would rather own a suite that stands a good chance of being legalized. Otherwise all that extra cashflow is at risk.

 

[cagoodrow]

I agree with Sherilynn. Know all the necessary requirements to make a basement suite legal. While searching for properties, evaluate what needs to be done to legalize and the approximate cost associated with that. In my experience even if the listing says "Legal suite" it may not be registered with the city. Make sure you plan/budget for the scenario where you could be forced to change (remove suite or legalize).



If you do purchase a property with an illegal suite, keep in mind that it is likely your neighbours or former tenants who can call the city on you. Keep your property well maintained, build good rapport with your neighbours and maintain a strong relationship with your tenants (so they're not angry when they leave).



Best of luck,

-Chris

 

[HeatherBrandt]

I agree with "a suite that stands a good chance of being legalized". Leaves your options open. When it rains, it pours, so assume it will be the worst time in your life/economy when suite decisions need to be made.



In addition to legal requirements (windows, parking, fire proofing) I would add to strongly consider the layout of the basement suite. Illegal basement suites can be really wonky.



Ask: would I live here if I had only $X for rent? I don't mean bling factor (paint color/stainless steel appliances-easy to deal with later), I mean:

-will I gash my head on the furnace ducting every day because of ceiling height?

-how much brother-in-law/real estate investor in training work has occurred in this property? Expect surprises behind the drywall!

-is there room on the electrical panel for upgrades if needed? What does the plumbing look like?

-will the landlord be in my suite all the time to deal with furnace, HWT, water shut offs, drains, meters, because they are all in my suite?

-can I get normal sized furniture down the stairs and into the bedroom?

-are there sufficient working heating vents for the suite?

-Is the bathroom functional (correctly vented as windows of little benefit, plumbing reasonable, no weird electrical beside water sources).

-Is there outside storage for me or will I feel the need to keep my spare gasoline in my suite? (true story)



Good luck. See if you can find people several people who have owned suited properties (preferably those who have lived in and also own) and sift through the advice.

 

[Thomas Beyer]

[quote user=Sherilynn]I would rather own a suite that stands a good chance of being legalized.


An opinion (not legal or financial advice):



Several critical issues make a conversion of most (99%?) "illegal" suites an expensive undertaking:



a) all windows above ground

b) fire code separation between up and downstairs

c) separate heating system (most homes are not set up for that, i.e. billing systems or separate meters)

d) enough parking on the property .. say another 2 cars on the property

e) separate 240 volt circuit for washer/dryer/stove/dishwasher and separate electric meter



Yes, there is risk with having an "illegal" suite, but it is common practice. The real issue is not whether it is legal or not, but

• rentability,
• nuisance to neighbors, and
  ability leave through windows as an alternative to exit through door in case of a fire !

Thus, speaking form a prcatical (not legal point of view) as long as the suite is useful to renters (i.e. ceiling heights, noise from upstairs, bathroom size, kitchen usefulness, size, access, lack of frequent by upstairs owner), doesn't create an issue with neighbors (due to excessive noise, parking of 3 rusty cars on the street, weird smells/aka drugs) and ability to exit in case of a fire I woudl not worry too much if the suite is legal, or "illegal".

 

[Sherilynn]

Other expensive undertakings to legalize a suite (non-exhaustive list):

• replacing exterior railings (if they have horizontals)
• hardwired, interconnected smoke alarms
• drywalling furnace rooms and all storage areas
  fire sprinklers in areas that cannot be 100% drywalled
  ceiling height, including in stairwells
  installing fire-rated doorways between suites

Separate heating is not yet an issue for existing suites, only for new suites. And separate meters is a convenience, but not required.



Aside from safety, the biggest risk with an illegal suite is that a vindictive ex-tenant reports it. Imagine the fun of having to sweet-talk a horrible, deadbeat tenant out of fear that they might report the non-conforming suite to the City. It happens.

 

[Thomas Beyer]

[quote user=Sherilynn]the biggest risk with an illegal suite is that a vindictive ex-tenant reports it. Imagine the fun of having to sweet-talk a horrible, deadbeat tenant out of fear that they might report the non-conforming suite to the City. It happens.
fair enough .. or a mean neighbor ..