Today, our experts dive into different types of income suites the benefits of choosing a home that includes an income suite and some important differences between garage, or garden suites, and basement suites in Edmonton.
What is an Income Suite?
An income suite is simply an area either in your home, or on your property, that is rented out for additional income.
The two living spaces are completely separate from one another, which is a welcomed bonus for people or families who enjoy their privacy, but want to make use of extra space.
Each of the two living spaces include a kitchen, bathroom, living space, furnace, and at least one bedroom.
Did You Know? While garage and garden suites are most popular within some of Edmonton’s pricier, central neighbourhoods such as Glenora and Garneau, Lincolnberg Master Builder is actually one of few builders in the Edmonton area that builds this type of detached income suite in Edmonton’s new communities, too!
What are the Benefits of an Income Suite?
- An income suite provides extra income. Perhaps the most popular benefit of an income suite is that it helps you with your mortgage and financing. Fall in love with a home just a tad over your budget? If the home you are hoping to buy includes an income suite and you are able to arrange and prove a renter, lenders will actually include the future rent payments as income when calculating your debt servicing ratios, and determining whether or not you qualify for the home.
- An income suite helps you build equity in your home faster. When your home includes an income suite, you’re essentially enjoying the benefit of someone else paying (or at least contributing towards) your mortgage! When the time comes to sell, you will have paid down more of your mortgage than you would have if you were living in the space alone.
- An income suite allows for multi-generational living situations. It’s no secret that many different cultures from around the world still honor the tradition of having grandparents live with them. Secondary suites allow for families to enjoy closeness, while still having the option for privacy, too.
- An income suite helps reduce urban sprawl. By using the space more efficiently, more people are able to live on the same piece of land, which reduces the need for communities to continue to build outwards.
Who Rents Income Suites?
- Students – we’ve all been there, searching for a private, quiet, affordable place to make Kraft Dinner, put our bed and clothes, sleep, shower and study. The wonder years.
- New professionals – they’ve started a career and are ready to work hard, but they want a safe and affordable place to live as they save towards a downpayment of their own.
- World travellers – they live to work enough to cover their expenses and plan their next adventure.
- Empty nesters – kids have moved out (hallelujah!) and they don’t need their big house anymore.
- Those undergoing life transitions – Whether it’s newly singles, new career choices, or simply making a change of province/city, your income property could be the bridge to someone starting a big part of their life over again.
How Much Can I Make From An Income Suite in Edmonton?
Typically, in the Edmonton market, a brand-new secondary suite rents for $800 – $1,200 per month. Kijiji and RentFaster are great online sources to see what rental rates landlords are advertising in the area you’re thinking of building.
What you can charge for rent entirely depends on how large the space is, how many bathrooms and bedrooms there are, and whether the suite includes things like an in-suite laundry and a dishwasher. Don’t forget location, too!
What are the Different Types of Income (Secondary) Suites in Edmonton?
In Edmonton, there are essentially two types of income suites available: basement suites (sometimes known as legal or in-law suites) and garage suites (sometimes known as garden or laneway suites).
What is a Garage Suite?
A garden suite is a single or two story suite built on top of your garage. There is a lot of versatility when it comes to garden suites, they can have multiple bedrooms and bathrooms, and some even have balconies.
According to the City of Edmonton, a garden suite is “a self-contained dwelling located in an accessory building that is physically separate from the principal single detached dwelling and which may include a garage. Typically, garden suites are single or two storey structures built in the back yards of single detached homes and must have their own kitchen, bathroom, and living space. You may also know them as garage suites, carriage houses, backyard suites or laneway homes.”
What is a Basement Suite?
Basement suites are probably what you think of when you hear “income property” as they have been around a lot longer than garden suites. Basement suites are often accessed through a separate entrance on the side or rear of the house, and can be built in homes with walkout basements for extra light. Basement suites have long been known as a great alternative to living in an apartment as they provide a little more privacy (only one send of neighbours) and are often a little larger in size. Basement suites are essentially a finished, liveable basement that is rented out and includes a separate entrance, kitchen and bathroom, among other things.
How Do I Choose Between Building a Basement Suite or a Garden Suite?
By comparing the Pros and Cons of both types of suites, you may find that one is a better fit for your home:
Pros of a Basement Suite
- Less expensive to build
- More common and well-known
- Water, sewage and gas lines are already connected so the build takes less time than a garden suite
Cons of a Basement Suite
- Tenants live below ground with less natural light and airflow
- Shared ceiling and sometimes entrances
- Food smells from different suites can permeate
- More risk with emergencies in case of fire or flood
Pros of a Garage Suite
- More privacy, no shared walls or entrances with your tenants
- Tenants get to live entirely above ground with more sunlight, airflow, and windows
- Less risk in case of emergency such as fire or flooding
Cons of a Garage Suite
- More expensive to build
- Take up more of your yard
- Different bylaws to follow
What Makes An Income Suite Legal in Edmonton?
A legal suite must have proper permitting, or you will be heavily fined and either be forced to stop collecting rent or apply for permits and be charged additional fees on top of that.
The City of Edmonton says that a legal income suite must have:
- Legal Permits
- 9′ Basement Foundation Wall (for basement suites)
- An Additional Side Entry
- Additional Furnace & Hot Water Tank
- Additional Appliance Package
- Extra Fire & Sound Protection
Explore An Income Suite Home With Lincolnberg
So, will you become one of the many Edmontonians who have chosen to adapt their homes so as to make an added income?
Lincolnberg Master Builder is proud to be one of the leading Edmonton home builders when it comes to building beautiful, income-generating secondary suites and we’d love to learn about your needs and begin the conversation.