Benefits of Single Detached Houses with Secondary Income Suites
I can appreciate that not everyone wants to be a landlord. However, the reality in this current market, is that a single detached house with an income suite is the easiest way to leverage out of a condo or townhouse and into a standalone home.
There has been a huge increase in homes with separate income suites on the market. This speaks loudly to our current housing affordability situation. It also shows the strong desire that people still have to be able to own their own detached home. Here are some distinct advantages to being in a detached home by bridging the gap with a secondary suite.
1. No More Strata – You might love your neighbours but I am not sure you love being in business with them. The reality of a Strata is often not as romantic as it first seemed. There are a lot of cooks in the kitchen and getting a large complex to all agree can be nearly impossible. If you are tired of the arguments, negotiations, monthly strata payment and lack of personal control it may be time to consider a standalone house.
2. Requiring Less to Qualify – Understandably the bridge between a townhouse or condo and a single detached house can be significant. The additional money needed to fund the purchase might be daunting. When purchasing a home with an income suite, the potential rental income is factored into the mortgage qualification and added to your income. What this means is that you will need less to qualify. Depending on the lender they may add up to 90% of the rental income into the equation.
This case study example provided by Keegan Cassidy of The Mortgage Group
Rather than needing $200k to qualify for a $1 million dollar mortgage, with the addition of the rental suite, the borrower only needs to earn $132.5k per year in household income. Please note these numbers change depending on interest rates but the general concept remains. Revenue from a secondary suite equals needing less to qualify
3.Space to grow – Secondary suites provide options. You may need the income now to pay the mortgage but down the road you may decide to use the suite for a multitude of different possibilities. These suites are fantastic for live in nanny’s, grandparents who are downsizing and would like to be closer to family, providing a safe and affordable space for a loved one who is ill, a teenager hang out and media room, additional guest accommodations, or possibly a way to transition a teen into a young adult by providing the space for them to learn to live on their own.
It also does not have to be all or nothing. You can get creative. If you need some of the additional space but not all of it, possibly consider renting a room in the basement. If you have a local college or university near your home, affordable housing is always needed for students. Room rentals can go from $600 - $800 per month and can often be tax free.
4. Passive income for retirement – We are not often thinking this far down the road. Sadly most people will need to sell their primary residence and downsize at retirement. The cost of keeping the house without earning income from a job can become too expensive. A bonus for homes with income suites is that you can go back to renting out the suite. The passive income earned offsets the cost of property taxes and utilities and can sometimes be the deciding factor of whether or not you can stay in the home that you love for your golden years.
5. Cost of moving – Moving is expensive. By the time you add in property transfer taxes, real estate commissions, lawyers and movers these costs can be high. By purchasing a home with a secondary income suite you can have all of the options that you need for many years to come and help limit the number of moves you make in your lifetime.
If these concepts make sense to you, it may be time to consider the plunge. With over 20 years of experience in single detached homes with secondary suites, I specialize in properties with purpose. Have a look at the 'Properties' tab of my website to find single detached homes with suites currently on the market in North Vancouver.
Give me a call to start your search today.