Turning Your Basement into a Rental Suite: What to Keep in Mind
November 27, 2024 | Posted by: Sherry Corbitt
Do you want a way to create extra cash flow by utilizing an asset you already have? Well, converting your basement into a rental suite can do just that! Below are some things you will need to consider.
Property Zoning
Zoning is implemented by the town most commonly being residential and business. You will first need to confirm with your town prior to starting renovations. If you are not zoned for a rental unit you can apply to have this reviewed and changed.
Rental Regulations
In general, most cities will require:
- A parking spot for the tenant
- A separate entrance, kitchen, and bathroom
- Minimum window size and installation of smoke detectors
- Functioning plumbing, heating systems, and electrical outlets
Insurance Coverage
You will need to contact your home insurance provider to update your policy. This protects you from potential damages and other liabilities of having tenants.
Rental Agreements
Another consideration is the rental agreement with the prospective tenants. You can use a realtor or lawyer to draft a standard rental agreement. This will protect you from many liabilities and achieve a mutual understanding with all parties.
Additional Incentives
- First Nation individuals may apply for a government program that offers up to $60,000 to help build a rental suite!
- The “Multigenerational Home Renovation Tax Credit” may allow individuals to be reimbursed up to $50,000 when creating a living space for family members.
- If you have been a homeowner for 15+ years, you may be eligible for programs in Ontario that support home additions.
While many of your city's regulations and incentives can be found online, visiting your city hall will allow you to get the most accurate advice and required steps. Creating a rental space requires great research and due diligence, however this investment can be very financially rewarding! Please reach out to me if you have any questions, I am always here to help with your mortgage needs!
Your Broker for Life,
Sherry Corbitt
