Investment Property

Building a laneway home or carriage home is an excellent way to add net worth and bring in income. If you already own the land, then the mortgage cost of the building is usually less than the rental income it will generate. Part of the reason is that home is usually independent – not attached like a condo or suite in a house, so people prefer that little bit of privacy. And of course, its new. So there is a premium rent that you get to collect.

These pictures show the result of a client of ours that had a larger property on which they had Alair Homes build a 2 car garage with workshop area, with a 2 bedroom home over top. This configuration is typically referred to as a carriage house. In some municipalities, or some neighborhood zones, if you build a carriage house (versus a laneway home which does not have a garage), you would be allowed to stratify that section of your lot and therefore be able to sell it independent of your home. Huge gain potential in that case!

A typical laneway home built for rental purposes starts as low as $200,000 including the new services for water and sewer. Hire a competent builder with experience in laneway or carriage building as some of the bylaws are different compared to main homes.

Adding onto a Property to Increase Rental Income

Another great potential for rental income is from suites in the house, usually in the basement. A two bedroom suite with one bath will get you the best rent to cost ratio, again providing more net income after mortgage costs for the construction. Be sure to hire a competent experienced renovator that has lots of experience with this type of work. (You don’t want to become an episode of the Holmes on Homes TV show). The professionally designed and executed jobs look great, rent fast and make money. Avoid the hacked together handyman special if you want no hassles and good income.