Rental Owners Experience

[DBrown]

So, my partner and I are trying to decide our best option. Here is a little description of the property.

Its a Bi-level with the stairs at the front door going upstairs and going down stairs. The only other entrance is the back door off the deck going upstairs. What we are trying to decide is whether to close the front access off to the upstairs completely and put in a separate upstairs laundry, OR block it off with a door so the upstairs suite still has access from the front and then have the existing common laundry downstairs in the utility room.

I like the idea of the separate laundry, even though it will cost more to do. My partner things it wouldn`t make sense limiting the upstairs renters to only having the rear entrance access. There is street parking in the front (pretty much guaranteed 2 stalls in front of house plus more across the street if needed) and the rear has a two car parking pad.

Also, whats the best way for making a budget for your reno`s? We already own the property and are putting a basement suite in. How do you know how much to spend to make it profitable?

 

[housingrental]

I would not spend extra to do something that eliminates a front entrance for a unit.
Can`t you find a way to do this (stackable w/d ? ) so that each suite has laundry if that`s the ideal?

 

[DBrown]

QUOTE (housingrental @ Oct 10 2010, 11:25 AM) I would not spend extra to do something that eliminates a front entrance for a unit.
Can`t you find a way to do this (stackable w/d ? ) so that each suite has laundry if that`s the ideal?

I had a renovation company walk through it with me and thats the best place to fit the w/d (and yes it would be stackable) without removing any extra storage which is limited to begin with. There is one closet at the end of the hallway that would work, but its the only real space for bathroom/cleaning items etc.

 

[housingrental]

I`d take less storage over losing a front entrance
QUOTE (DBrown @ Oct 10 2010, 03:18 PM) I had a renovation company walk through it with me and thats the best place to fit the w/d (and yes it would be stackable) without removing any extra storage which is limited to begin with. There is one closet at the end of the hallway that would work, but its the only real space for bathroom/cleaning items etc.

 

[DBrown]

QUOTE (housingrental @ Oct 11 2010, 08:56 AM) I`d take less storage over losing a front entrance

What about less storage over a separate laundry?

Also, from my first post, any suggestions on figuring out what makes sense as far as a budget goes for our rental suite reno?

 

[housingrental]

I`d take less storage
I`m not sure what your second question is asking - please re-word and I`ll try to help QUOTE (DBrown @ Oct 11 2010, 01:34 PM) What about less storage over a separate laundry?

Also, from my first post, any suggestions on figuring out what makes sense as far as a budget goes for our rental suite reno?

 

[DBrown]

QUOTE (housingrental @ Oct 11 2010, 04:10 PM) I`d take less storage
I`m not sure what your second question is asking - please re-word and I`ll try to help

My partner and I have to come up with a budget on how much we want to spend on developing the basement suite. We have the funds needed, but where do you cross the line and say thats too much money for what we would get out of it. We are still waiting on our final quote, but were given a ball park of around $20,000 - $25,000 to complete the suite. As far as rent goes, we were told to expect around $800-$900/month. In the ACRE system it shows what would be a good investment when purchasing a property, but I don`t see how to use the same system in our case, when you already own the house and are just talking about renovations.

 

[bizaro86]

QUOTE (DBrown @ Oct 11 2010, 05:37 PM) My partner and I have to come up with a budget on how much we want to spend on developing the basement suite. We have the funds needed, but where do you cross the line and say thats too much money for what we would get out of it. We are still waiting on our final quote, but were given a ball park of around $20,000 - $25,000 to complete the suite. As far as rent goes, we were told to expect around $800-$900/month. In the ACRE system it shows what would be a good investment when purchasing a property, but I don`t see how to use the same system in our case, when you already own the house and are just talking about renovations.

One factor you should consider is the rental cost of having a basement suite. You`d probably get a higher monthly rent for a whole house than a main floor suite. For example, if a whole house goes for 1400, a main floor suite for 1100 and a basement suite for 900, then your incremental value from the suite is $600/month. You now have 2000/month, against 1400 before. So you should only count 600 worth of new income, instead of the full 900 you`re getting for the suite.

I`m not sure what the numbers would be in your location, these are just illustrative.

Michael

 

[DBrown]

QUOTE (bizaro86 @ Oct 11 2010, 07:17 PM) One factor you should consider is the rental cost of having a basement suite. You`d probably get a higher monthly rent for a whole house than a main floor suite. For example, if a whole house goes for 1400, a main floor suite for 1100 and a basement suite for 900, then your incremental value from the suite is $600/month. You now have 2000/month, against 1400 before. So you should only count 600 worth of new income, instead of the full 900 you`re getting for the suite.

I`m not sure what the numbers would be in your location, these are just illustrative.

Michael

I get what your saying. That makes sense. So if we currently live in the whole house right now getting no rental income, and when we put the suite in the basement and should expect around $900 a month, we would count the whole $900 then right?

 

[housingrental]

$900 less additional costs from operations - wear and tear - utilities - cleaning - advertising - your time to rent and management the unit + put a dollar value to loss of extra space for your own use + hasstle of having tenants below you and losing noise freedom and potentially dealing with unpleasent situations - From a financial perspective even after costs your likely netting more than $600 per month which most people would consider a great return for a $25,000 investment.

Personally, I would not do this. I`d rather be $600 poorer each month and have a fully detached home with no one living below me. QUOTE (DBrown @ Oct 11 2010, 10:41 PM) I get what your saying. That makes sense. So if we currently live in the whole house right now getting no rental income, and when we put the suite in the basement and should expect around $900 a month, we would count the whole $900 then right?

 

[DBrown]

QUOTE (housingrental @ Oct 12 2010, 08:40 AM) $900 less additional costs from operations - wear and tear - utilities - cleaning - advertising - your time to rent and management the unit + put a dollar value to loss of extra space for your own use + hasstle of having tenants below you and losing noise freedom and potentially dealing with unpleasent situations - From a financial perspective even after costs your likely netting more than $600 per month which most people would consider a great return for a $25,000 investment.

Personally, I would not do this. I`d rather be $600 poorer each month and have a fully detached home with no one living below me.

Thanks for the information. I never thought to take some of those items into account when trying to make our budget. So looks like it is a good investment. Personally I wouldn`t do this either, but its our "foot in the door" as far as real estate investments. Hopefully it won`t be for too long as we have plans to purchase a second property some time in the next year or two.