For the past ten years, Scott McGillivray, a 30-year-old real estate entrepreneur, has made a living by transforming houses into income properties. Today, he manages 18 properties with over 100 tenants and here he shares his top tips for creating legal income suites that will help you offset your rising mortgage payments.
1. Make sure it’s worth it
The cost of renovations has to be able to pay itself back within two years rent. Scout out local markets or get a professional opinion.
2. Tag team, if you can
To use a cliché, two heads are better than one, and home-owning is no exception. Getting to your desired final product is a journey, and having a teammate to share frustrations, anxieties and costs with is invaluable.
3. The best way to learn is to go through the experience
You can read as many books as you want, but you have to experience it. Every home is unique, and every home will reveal its own problems and potential solutions.
4. Whatever you budget, add 25 per cent
When renovating your space, despite what a professionally quoted budget says, add 25 per cent, just in case. If you don’t go over, nothing lost. But if you do, at least you were expecting it.
5. Houses are like onions
The more layers you peel back, especially while demolishing, the more problems you’re going to find. Count on hidden gems like mould, live wires and any other hidden costs, just in case.
6. Consider all the options
If you have a 3 story plus basement house, why just rent out only the basement? Doubling the space not only allows you to live mortgage-free by increasing the rent, it also increases the value of the home.
7. Make sure the space is livable
If the kitchen has zero counter space and the bedroom can only fit a bed, not only is it going to be hard to find someone to rent out your unit, but think of the types of people who might be wanting to rent out your unit.
8. Don’t skimp on the drywall, especially on the ceiling
Not only do you want a fire barrier between you and your new housemates, you might be thankful for a little bit of sound-proofing in the long run.
9. Start on the outside
A separate entrance is key when renting out a basement, especially if you don’t want to mingle too much with your new tenants. And you might want to make sure there are no potential lawsuits hanging around – such as slippery stairs or rotting wood.
For information on refinancing your property to transform it to an income property please call us at (250) 862-1806.
We are also available to provide you with professionals to help you draw up plans, perform the renovations or
provide legal advise.