Investing in a rental property definitely has its benefits- extra income for space you don't need is always enticing. What if you had a property already and wanted to add an addition or renovate a portion of your home to accommodate this? Well here are a few tips to keep in mind to do it right!
1. Planning and Timing- If you are thinking about investing in your property by adding an addition or simply renovating an existing space, we highly recommend that you start by going to your local Municipality office to familiarize yourself with their requirements, rules and regulations as they can vary from district to district. Starting work before permits are issued is asking for trouble as cities and municipalities can send inspectors to randomly check in and make sure everything is authorized- failure to do so can result in tearing down completed work and getting a monetary fine. Planning is key to having renovations go smoothly- make sure all your plans are exactly how you want them as obtaining permits can vary in processing time from a couple weeks to months depending on how extensive you are renovating and changes may prolong the approval time.
Coordinating a project like this is time consuming for homeowners, can take several months of planning and then several weeks or months (depending on the scope of work needed to be done) and although its entirely possible to accomplish, it can be extremely stressful to someone not familiar with construction when you have to deal with engineers, plumbers, inspectors, etc. Hiring a general contractor is a great idea as they become your go between- taking what you need and want from the rental suite and coordinating inspections, reputable trades and structural engineers while making sure everything is up to code and legal. This can add to the cost of your overall construction but having someone with the long-time knowledge of construction, building codes and regulations can save you money in the long run.
2. Small/Big Details- Some of the small (or big) details are often forgotten if a homeowner is adding a rental suite. Properties with built in suites are great as they usually are already up to code and ready to move in. Adding on an addition or renovating a basement to form a suite involves making sure there are proper exits in case of fire, fire separating, soundproofing (for your benefit as well as your tenant!), sewer lines if you need to add a toilet or water, electricity etc and all need to be approved and permitted.
3. Ask Questions!- It is your property and your money, don't be afraid to ask your trades or general contractor questions! Do your homework- make sure your involved enough to know your house inside and out or it could lead to lengthy delays, getting a product your unhappy with and added stress financially and mentally!
4. Be Prepared- When it comes to renovating or adding additions, it can sometimes feel like you are opening a can of worms. By tearing down walls, moving pipes or flooring, it can uncover some nasty surprises like mould or old building codes that have not been updated. In order to proceed, these problems MUST be addressed and fixed before continuing and sometimes to fix can be costly. Always have a contingency fund set aside for potential issues and be prepared. 'To be prepared is half the victory'- Miguel de Cervantes
5. Know Your Tenant and Landlord Rights- Being a landlord is a full-time responsibility and does requires constant attention. Before starting any work, again do your homework and learn your rights as well as the rights of your prospective tenant(s). If you feel it is something you can handle, make sure that there is a proper legal contract in place detailing important details such as the agreed upon rent, utilities, expectations, and information pertaining to deficiencies, damages, and what happens if there is a dispute. It is perfectly fine to be a little picky when it comes to renting your suite- after all, this person will be living in your home. You may not see them but they will be using your property and utilities.