QUOTE (markl @ Sep 29 2009, 08:29 PM) Our first principal residence was 2 units one on the main floor and the basement and a unit on the 2nd and 3rd floor.
Well unless legal you cannot use the income to qualify for the mortgage it does help as we used the money to do a couple of things we payed down the mortgage quicker, used the excess money to invest other places as well as pay down other debt.
As for making a legal suite you have to check with the city to ensure they allow it and get permits and have it inspected to their standards.
Most municipalities differ on their rules.
We did it in order to get into a home we could afford in the Toronto area. The monthly rent absolutely helps our cash flow situation. I think it is great for me, as I learned how to be a landlord hands on. I concur with Mark, you cannot use basement rental income to qualify for mortgage unless it is registered as legal. The legality is two-fold: zoning and fire/safety code. Make sure it is zoned properly first before renovating. Zoning also will have requirements on how a two suited property may look (ie. some do not allow two entry doors at front of house, minimum parking requirements).