Income Providing Basement Suite
Cooperating with your sibling as a kid can be hard…and it gets even more complicated as an adult!
About five years ago, two brothers who wanted to start investing in real estate contacted me. They both had great full-time jobs and some savings that they wanted to invest.
They were looking for an income property under $315,000 that they could purchase, add a basement suite (together they had approximately $23,000 to renovate with), and rent out. All of this had to happen within the next 6 months. Naturally, we got started right away!
The best style of home for a rental income property in Edmonton is a single-family, bungalow with both a front and side entrance. It must be a minimum of 950 square feet with at least two bedrooms upstairs, and one in the basement, or ideally enough room to make two. Full baths on both levels with plumbing to add a washer and dryer on the upper level. Installing a washer/dryer on each level increases the amount of rent you can ask for.
Rental homes need to have legal-sized windows in the basement and other legal suite requirements to meet. I directed my clients to the City of Edmonton Planning and Development webpage. I also sent both brothers links that explained how to apply for secondary suite permits, outlined the costs, and other beneficial information such as printouts on grants for renting to low-income tenants as well as the Landlord and Tenancy Act.
I wanted to make sure they were fully prepared for the venture they were planning and that they did their due diligence. We talked in length about the rental market and which locations within Edmonton would yield the most profit.
To be able to keep a close eye on their rental property, they decided to buy in Millwoods, which is where they both lived. We began viewing homes in that area immediately after the pre-approval came through later that week.
After viewing our first four homes, it was clear to me that these brothers had very different ideas of what types of renovations they wanted to do and where to spend their $30,000 renovation fund. With every home we saw that day, I could feel the tension growing.
As an agent, this type of disagreement is common between all types of clients. He liked House A because of the high ceilings, but she likes House B better because of the kitchen layout. I joke with my clients that I am half REALTOR® and half counsellor. Keeping the peace is important during showings and often clients let their emotions take over.
It’s my job to make sure everyone involved is focused on the task at hand and that we are all working towards a common goal. In this case, making money off of a rental property!
With expert research and detailed emails, I was able to help the brothers find a happy medium with the style of suite they purchased and renovated. The basement is currently being rented for $1,050 and the upper level for $1,200, which means a total of $2,500 each month for my clients.
Since this purchase, they have both gone on to purchase new family homes with me as well as a second income property.