New Canadian Mortgage Rules Open Up Opportunities for Homeowners
Why Consider a Rental Suite?
Hey all, you’ve got Jim here with Fort Sask Reno. Welcome back to our YouTube channel! Today, we’re diving into a hot topic: basement suites, lane suites, and the opportunities they present. Whether you’re looking to maximize your home’s potential or create an extra income stream, rental suites can be a game-changer.
Why would you want to add a rental suite to your property? Here are three compelling reasons:
- Increased Income: On average, a rental suite can bring in $1,300 to $1,400 per month. That’s almost enough to cover most mortgages!
- Boost Property Value: Adding a rental suite can significantly increase the value of your home.
- Take Advantage of New Mortgage Rules: Recent changes set to roll out in January 2025 offer incredible financing opportunities for homeowners.
Let’s break this down and explore how you can turn your property into a powerful asset.
The Canadian Government’s New Mortgage Rules
The Canadian government recently announced mortgage insurance rule changes designed to encourage homeowners to add secondary suites. These rules are set to go into effect on January 15, 2025.
Key Highlights of the New Rules:
- Homeowners can borrow up to 90% of their home’s post-renovation value to finance the construction of rental suites.
- Secondary suites must be fully self-contained with separate entrances and comply with municipal zoning requirements.
- Short-term rentals (e.g., Airbnb) are excluded from these rules, focusing instead on long-term rental housing solutions.
Why Densification Matters
Densification involves creating more housing within existing neighborhoods. Why is this important?
- Lower Municipal Costs: Expanding city limits increases infrastructure expenses like sewer, water, and power lines. Densification uses existing infrastructure, saving money.
- Increased Efficiency: By building up rather than out, cities can optimize garbage collection, emergency services, and other resources.
- Sustainability: Compact living reduces urban sprawl, preserving farmland and green spaces.
For homeowners, densification offers a practical solution to maximize property potential while addressing housing shortages.
Real-Life Example: Building a Garage Suite
I’ve been considering building a garage suite on my property in Fort Saskatchewan. With a spacious lot and zoning approval already in place, this project could provide:
- A cozy one-bedroom suite above a two-car garage.
- Covered parking and a workshop area.
- An ideal setup for downsizing while renting out the main house for significant retirement income.
What Does It Cost to Add a Basement Suite?
Adding a basement suite typically starts at $75,000 to $85,000, depending on size and features. For most homeowners in Fort Saskatchewan, where the average property value is under $500,000, this investment is well within reach, especially with the new mortgage rules.
What Does a Legal Basement Suite Need?
- Separate Entrances: For tenant privacy.
- Egress Windows: Ensuring safe exits in emergencies.
- Independent Heat Sources: Meeting safety codes.
- Fireproof Separation: Between units for added safety.
- Self-Closing Doors: Required by fire regulations.
- Adequate Parking: Meeting city zoning requirements.
The Demand for Rental Properties
In Fort Saskatchewan, the demand for rental suites far exceeds supply. A quick search on Kijiji reveals very few options, with only one fully furnished executive suite listed at $1,800 per month and a single room for rent. This reflects a vacancy rate of less than 1%, according to the city’s mayor.
The Alberta Rental Market: A Growing Opportunity
The rental market in Alberta has tightened significantly over recent years:
- 2020: 6.9% vacancy rate.
- 2023: 2.1% vacancy rate.
This trend highlights a golden opportunity for homeowners to create rental suites and tap into the growing demand for affordable housing.
The Financial Benefits of a Basement Suite
Here’s how the new mortgage rules can help you finance a rental suite:
- Increased Loan-to-Value Ratio: Borrow up to 90% of your property’s post-renovation value.
- Extended Amortization Periods: Loans can now stretch up to 30 years, reducing monthly payments.
- Higher Equity Potential: Adding a suite not only generates rental income but also boosts your property’s market value.
For example, if your home is worth $500,000 and adding a basement suite increases its value to $650,000, you can now borrow 90% of $650,000 instead of 80% of $500,000 under the old rules.
Planning Your Rental Suite
Step 1: Research Local Regulations
Fort Saskatchewan has specific zoning requirements for secondary suites, including parking spaces, fire safety measures, and building codes.
Step 2: Design Your Suite
Work with experienced professionals to design a suite that meets tenant needs and maximizes your investment.
Step 3: Financing Your Project
Take advantage of the new rules to secure funding. Fort Sask Reno can guide you through this process, ensuring compliance and cost-effectiveness.
Fort Sask Reno: Your Partner in Basement Suite Development
At Fort Sask Reno, we’re not just contractors—we’re homeowners who understand the challenges and opportunities of creating rental suites. We’re currently building a legal basement suite on our property and are familiar with the entire process, from zoning to final inspections.
Our expertise includes:
- Navigating city permitting systems.
- Ensuring compliance with all building codes.
- Delivering high-quality renovations on time and within budget.
Why Fort Saskatchewan is the Perfect Place for Rental Suites
Fort Saskatchewan offers:
- Affordable housing prices.
- Proximity to Edmonton.
- A family-friendly atmosphere with beautiful parks and amenities.
The city’s growing population and low vacancy rates make it an ideal location for rental investments.
Get Started Today
Whether you’re considering a basement suite, garage suite, or other rental opportunities, Fort Sask Reno is here to help. From initial design to project completion, we’ll guide you every step of the way.
Contact Us
If you’re ready to explore the possibilities of a rental suite or have questions about the new mortgage rules, reach out to us:
- Phone: 780-271-4312
- Website: www.fortsaskreno.com
We look forward to helping you unlock your property’s full potential. Thanks for joining us, and don’t forget to subscribe to our channel for more tips and insights!
Conclusion
Rental suites are more than just an income opportunity—they’re a smart investment in your property’s future. With the new mortgage rules rolling out in January 2025, now is the perfect time to take action. Let Fort Sask Reno help you navigate the process and create a space that adds value to your home and your life. See you next time!