Principle Residence...

[mattrussell]

I wanted to get a general idea of how often a persons principle residence has a basement apartment rented out - is anyone currently doing this? If so, how is it going? What are the advantages/disadvantages to doing this - will it make a significant difference with the amount I will be able to afford? How common is it for a house to have a totally separate basement suite and how difficult would it be to `install` this.

I appreciate anyone taking the time to respond,

- Matt Russell

 

[markl]

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.

 

[Aneta]

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).

 

[JBagorio]

Before you do it I suggest assess your tolerance on following things:

• Privacy and safety of you and your family
• Willingness to compromise with your new neighbour to put up with noise or always conscious about making noise, etc...
• Willingness to Down sizingHow you will handle the utilities and sharing the responsibilities in and around the house.many more ....

Other than that it is a good option especially if you need the extra cash!

 

[DaveRhydderch]

Good responses.

As someone who has "installed" them, I wouldn`t recommend it unless you can do most of the work yourself. Your better off investing the money you would have spent on a basement suite, unless its legal in which case you can get your home re-appraised after its completed and get a lot of your money back.