Posted by: Daryl & Wendy Ashby | March 28, 2011

Rental Income

Are needing just a wee bit more income each month? Is it becoming a questionable as to whether you are going to be able to keep your home due to the increased cost of living ?  Then give some serious thought to converting that oversized storage locker of a garage into a rental suite.

Smaller garages may only provide for a bachelor suite, but that is worthy of an added $800 per month, or if you have a double garage, that could equate to a two bedroom suite worthy of $1200 – $1400 per month. On an annual basis that is $7200 to $16,800 added to your income. If you employer offered you that as a bonus, would you turn him or her down? Not likely.

You will need to outlay anywhere from $20,000 to $30,000 depending on the size of the garage and how deluxe you intent to make it, so give serious thought to how long you anticipate you will be remaining in the home. You are going to want to recover your investment before you move, or this idea may be better left on your desktop for the next home.

Many cities and municipalities frown on “additional accommodation” so you are going to have to call your respective local government and see what hurdles you may have to jump through or determine to do the work on the sly. In our neck of the woods, unauthorized accommodation can be found in 60% of all the homes we sell.

Keep in mind, if your new tenants are noisy and disruptive to your neighbours or if the number of cars parked on the side of the road distracts from their home value, they are going to complain to the local government and your new source of income may dry up as fast as you can say, “Where’s the money.”

If you decide to go ahead, most of the work you can do (my daughter does all her own renovations including floor laying, so yes; you can do it) in a few evenings or weekends, but you will likely need the help of an electrician to add lighting and switching, plus a plumber to put in that toilet outlet and water lines.

Make all your work reversible as the future owner may not want the income but would prefer the oversize storage locker. That may mean keeping the overhead door and building a false wall just inside it. Most garages provide sufficient windows and an addition access to permit the conversion, but take the time to draw up a floor plan before you start making a mess.

You may ask how this idea will affect the value of your home; well the answer is quite simple. More than 50% of buyers today are looking for the added income to offset the higher purchase prices, so they are going to view your home as having greater value than the one next door that has no suite. For those buyers who have no interest in the suite, you may have to consider taking an offer that reflects the removal of the suite which is a lot less than putting it in.

When it comes time to put a tenant to paper, visit your local Residential Tenancy Branch or look at their web page http://www.rto.gov.bc.ca/. There you will find all the forms you need. To get the right tenant, take your time, get into the home they currently residing in to see if you can live with their standard of cleanliness and above all else, sleep on the decision.

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