Hello BP,

I’m looking for some ideas on how I might be able to make my primary residence bring in some income. Housing is our biggest cost, and we love the place and worked hard to build it up from a vacant lot 1.5 years ago, but I feel like the smart thing to do is find a way to get it to offset some of the costs, especially since we’re expecting a baby later this year, and it’s already been diagnosed that he’s going to have some medical problems. However, I don’t want to give up too much of the privacy and space that we’ve worked hard for. I’ve got that feeling like there’s something obvious staring me in the face, but I’m too blind to see it… maybe someone else will!

Unlike a regular city house, we live on an acreage. The lot is 7 acres, 105m x 270m, flat prairie grasslands. Location is 13 mins from town (14k people), and 35 mins from the city of Calgary (1 mil). It’s still a commutable distance (my husband and I both work in the city, 45 mins and 60 mins respectively), but right on the edge of how far most people are willing to drive if they must work in the city. The house is a 3/1.5 1236 ft2 bungalow, unfinished basement. We also have a triple oversize garage, 30’ x 38’. It’s fully fenced, and there are also 2 horse pastures about 2.5 acres each and 1 horse shelter.

The property was appraised at $480k in February, and we have 20% equity with a mortgage of $384k. While we aren’t exactly close to the city, what I could see being the most attractive feature would be if we were to rent one of the pastures to someone with horses, as finding reasonably-priced rental accommodations with space for a couple horses is VERY difficult around Calgary, as that was me just a few years ago.

A few ideas I’ve had: (and I should mention that we’re zoned to allow either a secondary suite or a second dwelling.)

1) Finish the basement and turn it into a suite.

Pros: It already has a seperate entrance from the back.

Cons: We’d really like to use part of the basement for our own personal use, and would like to develop at least a spare room in the immediate future, and ideally the rest of it for personal use in the next 5-10 yrs. Cost would likely be $25k - $30k to finish it without having to do the work ourselves. And we’d be giving up a lot of privacy by having someone immediately below us. And we’re going to have a baby in the house.

2) Put a mobile/modular home on the property.

Pros: Easier/cheaper foundation to do. Easier to get rid of if we don’t want it there in the future.

Cons: Costs to bring over electricity, water, and install another septic tank and tie into the existing field, my guess is around $20k. County rules say it can’t be older than 10 years. Negative stigma attached to mobile homes, though they are fairly common around here.

3) Move a stick-built home onto a new foundation.

Pros: This is what we did with our house in 2017, I know the process and the costs involved. It often works out to be cheaper than buying a new/newer modular house. Stick built appraises better than modular/mobile. A smaller, cheaper bungalow (2/1) might be better than larger to limit number of tenants.

Cons: Still quite costly, tying into utilities was a larger expense than anticipated on our main house, plus a LOT of rewiring, new plumbing, and new HVAC was required. Costs could easily be around $30k just for that, and likely around $40k for house and moving. Plus cost of doing a basement or crawl space at a minimum, $12-15k, plus any additional reno costs for the house itself. Also once it’s there, it’s there for good, so I would feel obligated to rent it out rather than let it sit empty, even if future circumstances changed and I didn’t really want tenants living that close to me.

4) Something else entirely? I don’t have quite enough space to do RV/trailer storage (and don’t really want the eyesore of it either since we have sparse trees).

With any of these dwelling options, I would also rent out the front pasture for them to keep 1-3 horses. As I used to be a renter who had a horse, it was my dream to be able to live in a place with my horse(s) so close, but I couldn’t find anything for under $1800 + utilities, which was more than I wanted to spend on rent, so that’s probably going to be my target tenant, and I could see them being long-term.

My other concern is that if I add a separate secondary dwelling, the property won’t appraise for any more than it’s at currently because my lender only counts 1 house, 1 garage building, and up to 10 acres in the valuation, even though everyone knows that 2 houses are going to be worth more than 1.

So after this long-winded explanation, I’m open to ideas and opinions! Thank you!