Clients often want to find a property that gives them the option of renting out their basement. This can provide a source of income which can be extremely beneficial. They may be able to use the income from this rental unit to help pay the mortgage. How great would that be!
If you want to consider this as an option, It is important first to check with the local municipality, city or town to determine if accessory apartments are legal in the area you are searching. If so, you then need to consider the costs vs. benefits of this apartment. Quite often, existing basement apartments are not compliant with current building and fire codes.
To legalize an apartment or construct a new apartment, you will need a permit. Costs may include professional plans and drawings, the permit application fee and if approved, contractor and building costs. These costs can reach into the $20-$40,000 range. It is no easy undertaking.
As well, you should decide how long you want to own the property and rent out the apartment. Will you recoup your investment and make extra money? Also, consider the loss of living area in your home. Will this eventually be a problem if your family expands or the kids get older and want some room of their own? You may also have problems with your tenant(s). Are you prepared to deal with this?
Mike Holmes provides some important considerations in this National Post article on how to turn your basement into a proper apartment:
Click here to read this article.
If you have any questions about this topic, please contact me.
RE/MAX Escarpment Realty Inc., Brokerage