5 Tips for Creating an Income Suite
Make a little cash on the side with these easy tips for building an income suite.
Looking for another way to generate income? Consider installing an income suite (basement, apartment, upstairs flat) in your home. The rent can help you pay off your mortgage and provide a cushion if you ever lose your job. Scott McGillivray, real-estate entrepreneur and host of Income Property, now in its 2nd season on HGTV, provides some tips to keep in mind when creating an income suite.
1. Consider the Options
“I’m always looking for a natural division in the home,” McGillivray says. It could be the basement, but it might also be a foyer that divides a home’s main floor and the upstairs. Some retirees are converting the top storey of their house. Or you might have a garage that can be converted.
2. Determine the Necessities
Check the laws on incomes suites (including permits and zoning) with your municipality. You’ll also need to install a fire-and-sound barrier between you and your tenants and to create separate entrances.
3. Decide on the Amenities
Invest in quality functional items, such as toilets and tubs. But avoid spending on high design (e.g. fancy drapes), as you won’t get your money back.
5. Limit How Much You Spend
McGillivray suggest spending no more than two years’ of rent on an income suite. So if you’re planning to charge $1,000 a month, make sure the renovation costs less than $24,000.
This article was originally in the November 2009 issue of Reader’s Digest. Subscribe today and never miss an issue!