Q&A with Andrew Masters and Andy Higgs.
As the Realtors specializing in Laneway Homes and Garden Suites, we are well acquainted with the current marketplace and are excited about the explosion of Laneway homes popping up in downtown Toronto and the Greater GTA. We also know that first and foremost, prospective homeowners want to know what is affordable, along with the financial implications and ensuing benefits of investing in a home with Laneway suite potential.
Q: Does my property with Laneway home opportunity increase the value of my home?
Yes! Your investment in a home with laneway suite potential will definitely benefit you financially when it’s time to sell your home. Naturally, you can expect to get a higher price for your home when buyers see the income and lifestyle opportunities that derive from having a laneway suite on the property.
Q: What is the average cost to build a Laneway house on my property?
This depends on many variables as the construction costs are directly linked to the size of your laneway house, as well as the complexity of the build. Prices can be as low as $300,000 and go up from there. In general, laneway suites cost less than condos and generate more rental income than basement apartments – a financial win-win!
Q: What are my financing options?
The good news is that qualified property owners are able to finance 100% of the construction costs. There are Canadian banks and credit unions quite willing to lend to homeowners who are planning to build laneway homes.
As an added bonus, when your laneway suite is financed by a loan, you are able to deduct the interest on your loan if your unit is rented out. Be sure to report your rental income on your tax return if you are claiming this interest deduction on your loan.
Q: Will adding a laneway house increase my property taxes?
Yes. When you construct a laneway house, you are, in fact, making improvements to your property, which in turn, increases the value of your home. You can contact the City here (Property Tax Calculator) to find out how much more tax you will be paying.
Q: What is my income opportunity?
After deducting expenses such as design, construction and property taxes, the majority of laneway homeowners enjoy a healthy net positive cash-flow from rental income alone. Depending on the size, make up, and location of your Laneway house, it’s reasonable to expect rent in the range of $2,100 to $3,900 – or more – per month.
Q: Is there a requirement to provide parking for my Laneway suite tenants?
No. Although some homeowners choose to include parking in their Laneway home plans, there is no requirement for car space. In very deep lots, outdoor parking may be an option, while still maximizing the size of the Laneway suite. The City of Toronto does require two bike parking spots, however; a reflection of Toronto’s trend towards an eco-friendlier environment for pedestrians and cyclists.
If you have any additional questions about the financial implications of Laneway housing, please feel free to contact us anytime.
We are here to support you every step of the way in your Laneway home journey!
