How To Increase Your Buying Power With A Rental Suite

Would you like to increase your buying power and qualify for a higher-valued home? Then a house with a secondary suite might be an option worth considering.

There are many housing options on the market that have rental suites, often in the basement, that can give you extra income. If owner-occupied, meaning you live in one of the suites, these “mortgage helper” homes allow you to use up to 100% of the monthly rental income on your mortgage application. This, in turn, will help you qualify for a higher mortgage amount. It’s like having a part-time job without having to go to work! Typical basement suites can earn an extra $600-1000/ month, which can increase your buying power anywhere from $50,000-$100,000. 

There are many benefits to favour this option:

Extra income may allow you to purchase in a better neighbourhood or buy a larger home. This increase could be the difference between being able to afford something that has a garage or other valuable upgrades. Rental income could pay for future renovations and updates of your choice to your new home. Easing many different expenses that come with homeownership. 

In the long term, a higher-valued home will likely last you longer than a lower-valued option, which will save you a move in the future and all of the costs of that transaction. You may even consider keeping it as a revenue property when you are ready to move on to something else.     

You could face a risk of vacancy. There may be a few weeks or even months that the suite is vacant and you would not be bringing in income for that timeframe.  

On the other hand, there are a few additional costs to take into account. 

With a higher mortgage comes a higher down payment. You will need 5% of the total purchase price for a down payment. 

There will also likely be an increased insurance cost with tenants occupying the home. 

There will be an increased utility cost with additional people living in the home. Most basement suites will only have one water, electrical and gas service to the house, so you will have shared utilities; therefore, you will not be able to bill them out separately. Some homes do have separate utility metres, in which case the tenant can pay their own utilities. So that is something to watch for when looking at options. 

And that darn income tax. With an increased income comes higher taxes. In most cases, you can claim the mortgage as an expense against the income and write off the above-mentioned expenses related to the suite, as well as other maintenance items for the property. This is something you will have to consult your accountant on.  

All things considered, if purchasing a property with a rental suite is something that entices you, then reach out to the JC Realty Team for more information. We can ensure you are making an informed decision and guide you through your investment venture. We will connect you to the right team of professionals to get you on your way to homeownership and to landlord life.

Here are JC Realty Regina’s current listed properties with rental suites:

136 Quebec St. N | Churchill Downs

49 Wesley Rd. | Whitmore Park

50 Petersmeyer St. | Argyle Park

1811 St. John St. | General Hospital


Kailey chats with Angela Quartly with Dominion Lending The Mortgage Firm
about this option.

~ Blog Post By Kailey Heintz JC Realty Regina ~

Kailey Heintz | 306.529.8998 | kailey@jcrealty.com

Angela Quartly | 306. 520.7047 | angelaquartly@dominionlending.ca

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