When it comes to general investing, the goal is to strive for it to be more of an asset than a liability. This sentiment is no different when it comes to investing in properties. Notably, many have opted to invest in secondary suites in duplexes in recent years. Yet, what makes it worth investing in? Read on to find out if it’s a jackpot of investment or more of a crackpot liability.
What Are Secondary Suites?
Secondary suites are usually small self-contained apartments within single-family homes that their owners can rent out. To have a secondary suite, you must have a permit and meet certain standards if they are within 200 feet of an elementary or high school. These permits are often difficult to obtain, as the city wants to make sure these are not being used for illegal or undesirable purposes. Secondary suites can be a good investment for landlords, but they are often in high demand. Generally, you can expect a long waiting list for permits and an even longer list of people trying to get on that list.
What Makes Them Worth It?
Many people are attracted to renting out a secondary suite in their duplex, but are they worth it? The answer is yes. They can be an excellent way to increase your income. However, before you go out and buy a duplex to rent out a suite, you must do your research.
Here are some factors to consider:
Local Zoning Laws & Regulations
Secondary suites are allowed in duplexes as long as they meet certain requirements. They must have a separate entrance, kitchen and bathroom. The maximum number of suites per lot is two. You’ll also need a permit from the city even if you don’t live there yourself. If you don’t have any children at home or plan to live there yourself, this may not be for you. As mentioned above, permits for these can be difficult to obtain if your neighbourhood does not want them.
Cost of Secondary Suites
Getting a permit for a secondary suite can take several months and cost you several hundred dollars to complete. In addition to the other costs involved in buying and selling property, like the down payment, closing costs, title search and lawyer fees. If you plan to rent out your secondary suite long-term, paying this extra money upfront might be worth your while. However, if you are only planning on renting out your unit for a few years before selling, it may not be worth it. You’ll also have to pay extra property taxes on any rental income you receive from the secondary suite; however, this is generally not too high given how many years the unit is rented out for.
Is the Current Market Good for Secondary Suites?
It will affect whether or not people are willing to rent out your secondary suites. If it’s a tight rental market, you may have trouble finding tenants. If it is not, then you may have a lot of competition. You can check out rental listings or look online to see the current market’s state. It will help you to determine whether or not your secondary suites are worth it and if you’ll be able to find tenants for them.
How Much Money Can be Made?
The amount of money you could make depends on several factors, including the price you charge for rent and the length of time your suites are rented out. Keep in mind that if your unit is rented out long-term, they will pay less rent per month than if they were renting it short-term. Also, don’t forget about all of the additional costs associated with having secondary suites and the ones previously mentioned. You will also need to pay extra property taxes on any rental income from your units.
Any Additional Costs to Secondary Suites?
If you decide to get a permit for your secondary suite, then there will be some additional costs that you will need to pay. These include fees for the initial application, permit fees and building permits. In addition to these fees, there may be additional costs, such as getting a new furnace or air conditioning unit installed if necessary to have a secondary suite. If you don’t get a permit, then you won’t have to worry about any of these things; but if you do, then it might be worth your while to consider buying another property rather than doing this.
Before investing in a duplex as a secondary suite, it’s clear that it’s important to consider there are many variables. It can be worth it as long as you can afford what’s necessary to invest in one and obtain the permits required for one. In which case, you can expect to make additional income from doing so!
