All Forum Posts by: Jonathan Yeh

@Jonathan Yeh

Really hard to say depending on the basement, size, and contractor you use. I did one which we did a good deal of the work and hired out what we were not comfortable with (I am a millwright and electrician so I am very comfortable doing my own work). That one cost me 20k to finish, but once again, very hands on. Was our first one and I didnt have the money so sweat equity was our only choice.

I just did another one last summer which came to 32k for a fully legal suite, professionally done. The permits were pulled prior to me doing the work and the basement was empty. This was about 800sqft and only a 1 bedroom.

I would agree that 50 -60k is a pretty average cost but it really depends if the basement is empty, size and finishes you get done. The big thing here is DO NOT PAY MARKET PRICE FOR THE HOUSE. I usually try and find houses where the upstairs needs minor work and I can add value through the secondary suite. But the property needs to be at the right price point where I can re-finance to get some if not all my investment back.

@Jonathan Yeh

New furnace is between $6000-$8000

plus...

Fire protection which includes;

Fire supression between the units

Fire alarms and carbon monxide detectors

Egressed windows

Making sure electric is to code.

*Not worth it in my opinion

It would probably cost you approx. $50-60k to have it a basement developed professionally

permitted. Then have two sources of income without the stress or liability.

@Jonathan Yeh

Yikes a triple car garage! I know here we just need enough parking for the secondary suite but it does not need to be garage parking. Having a double car garage and a pad was more then adequate.That was one of my headaches with the illegal suite we had, not enough parking. Seemed to always become a fight of who got to park infront of the house. Another big one was heating and venting. I noticed a world of difference when we added a second furnace. Since the basement is inherently always colder it became a struggle trying to get both suites to compromise on a set temperature. The second furnace also cut down on noise between suites which travelled through the vents.

One item I would stress you do comply to, regardless the route you take, is proper fire separation between units. I saw this first had with my one friends tenant who experienced a nice kitchen fire in his basement suite. Luckily he had a legal suite and the fire was contained to just the basement. Had he not had a legal suite I don't think his insurance would have covered the damage and who knows how much further the fire would have travelled.

 There are thousands of these illegal suites in Toronto and they never get reported. There will be a rental crisis beyond what it already is

@Jonathan Yeh

What kind of rent do you expect to get from the basement suite? I know here in Edmonton we have a few that average around $1200/ month. For a 30k investment I can get an extra $14400 annually back. If you plan on keeping this property longer then 2 years I would say it's worth it to put the legal suite in. We did have one house with an illegal secondary suite in it but it was a nightmare to deal with and way more tenant complaints between units. An added bonus of having a legal secondary suite is when you re-finance the banks will typically give you an higher assessment then if it were a "nanny suite". I would stick with legal suites only, if you wanted to save a bit, keep it a sfh and add more bedrooms.

@Jonathan Yeh it doesn't matter what most other people are doing. It matters what is legal. You are in business now, operating as a professional. It's your responsibility to act professionally and ethically. There are valid reasons why basement units aren't legal. The neighbors don't want additional units (that's why you are worried about getting turned in). There are certainly insurance implications for renting an illegal unit. There may very well be safety problems, too.

If you want a way to use that basement space that adds income, find out what you are legally allowed to do and do that. If there is space for another unit, there is space for more bedrooms/home office/game room/luxury bathroom/kids playroom/media room/wine cellar/etc. Maybe you won't get the full amount you want, but you can get something, and probably for less than the $30k you were thinking of putting out.

If you can't make money legally, don't buy the property. There is no wiggle room on this.

If it's illegal, don't do it. Simple as that.