As the housing market in the GTA heats up for spring and summer, the number of homebuyers looking for new properties increases exponentially. With a limited housing supply in the city, many buyers will lose out in bidding wars when they do finally find the home worth making an offer on. Because the supply of homes available will not meet the demand of searching purchasers, many buyers will be forced to retreat back to the ever-relentless rental market.
And just look at the rental market in Toronto… vacancy rates are at an all time low. Approximately one third of all people in the GTA are leasing, and the supply of affordable rentals is also on the decline.
Fortunately, there’s a way that sellers, buyers and renters alike can benefit from this otherwise unfortunate situation…
A growing trend in the world of new home ownership is the incorporation of a second, self-contained apartment to the home, also typically referred to as an “income property’. Typical income property situations include basement apartments and duplexes, where the homeowner lives at the property, and rents out the portion they have designated as the separate unit for a premium… If you live in the city of Toronto, that premium ranges anywhere between $950 and $2000 per month, depending on the exact location, size and whether in fact it is a basement apartment or duplex. For the typical homeowner, that’s no chump change!
There are plenty of benefits that come with owning a rental property. Not only does it offset mortgage costs, but purchasing a home with a rental unit can also help buyers afford homes that they may not have otherwise been able to. In addition, income properties add value to homes and their resale value, plus ease the crunch in urban centres where space is typically limited for new rental developments.
As a landlord and income property advocate, I thought it would be fun and informative to do a series analyzing this growing trend in homeownership. Will the unit be legal? How do you find good tenants? What can you charge for rent? These are some of the topics I hope to cover over the next few weeks here on my blog. There’s a lot to learn when it comes to owning an income property, but you may be surprised to find out it’s a lot easier than you initially thought.
I welcome your comments, feedback and suggestions below. If you’re thinking of purchasing a rental unit and can’t wait for my next article, don’t hesitate to contact me. I’d love to share my insight with you any time!
– Trish Mutch