Posts Tagged ‘secondary suites’

Rental Property Success – A Basement Suite Can Bring In Secondary Income

Friday, March 1st, 2013

March 1st, 2013

alberta landlords basement suite

Want a secondary income? Why not consider a basement suite and become a landlord. According to a report in the St. Albert Gazette, adding a business suite to your home can increase your income as long as you do it right and follow regulations.

The Benefits of Installing a Basement Suite Using St. Albert as an example

Based on the last survey done by the Canada Mortgage and Housing Corporation, the vacancy rate here in St. Albert is an all-time low of only 0.9%.

Senior Housing Analyst for CMHC in Edmonton David Lan explains, “…that for every 100 apartments in St. Albert, less than one of those units – just 0.9 per cent – was available for rent. That translates into a high demand for rental accommodation,”

This definitely means that installing a basement suite can be very profitable, most especially if one follows the building regulations set by the St. Albert city administration. Although breakdown costs of the rental rates in a city such as St. Albert on basement suites, the going rate for a similar facility with the same provisions is almost a thousand dollars.

It’s important to follow the regulations

To date, there are 145 legally permitted basement suites in St. Albert. Landlords across Canada know how important it is to follow your local city laws and regulations.

Back in 2007, St. Albert City supported those who wanted to renovate their homes and build basement suites through the Basement Suit Grant. However, the funds on that program have already been awarded and are no longer available. Nevertheless, basement suites that were built through the grant program were rented on the following prices: $1,335 per month for three bedroom suits, $972 per month for two bedrooms, and $812 per month for single bedroom suites.

A $400 fee

Aside from the required $400 fee, it is mandatory for property-owners to pay extra attention to the requirements set by the Alberta Building Code to make sure that the structures made available for rent are safe and reasonably priced. The permits certify that the suites are absolutely safe devoid of anything that may pose danger to tenants including precariously built handrails and stairs, defective electrical connections, and hazardous sewer gas.

Prior to starting work, you must apply for a development permit and submit a drawing of the basement floor plan and parking area. Once that’s approved, all other permits must be obtained by skilled tradesmen, including a master electrician and a journeyman plumber and gas fitter.” But, he also adds that requesting for inspection at different stages during the construction process is necessary to ensure that you are following the building code to the letter. A permit does not assure that the finished product is code compliant.

Heating Systems

Basements suites are required to have its own heating system.  The City prefers two furnaces, but the main thing is that the heating system on both floors must operate with independent controls and provide some form of mechanical ventilation.”

Although there are no hard fast rules as to the limit of people that can occupy a basement suite, there are guidelines on the size of each room. For example, rooms for children 10 years old and below should be not less than 16 square feet in dimension while an adult room should be 32 square feet or bigger.

Are you concerned about the problems of being a landlord?

Being a landlord isn’t easy. There are many examples of landlords losing money and having a lot of stress if they get bad tenants.

Make sure you learn how to screen tenants carefully by reading networking with other landlords and learning techniques and getting tips at the Alberta Landlords Forum.

Tenants Out For “Revenge” Forcing Calgary Landlords Out of Business

Tuesday, March 6th, 2012

 March 6th, 2012

A recent report in the Calgary Herald details how tenants are forcing Calgary second suits to shut down.

Landlord Mchel Selim came to Canada thirteen years ago from Syria.  When he first arrived, he could only afford a basement suite.  Selim is proud he is now in a position to own investment properties and rent out basements suites to others who want low cost rental housing.

Selim was renting to a single Mother and her daughter when he was reported for having an illegal secondary suite.  Later he received a another notice for another property he owns.  This will force the tenant to leave and Selim will receive no income.

Selim understands if the notices to shut down were due to neighbors upset with the tenants displaying bad behavior or arguments over parking.  However, both of the government notices were by tenants angry at their landlord!

Tools of Vengeance

The first notice was by the tenant who lived in the upstairs unit who was upset the landlord complained about friends living with him without paying rent.  The second notice was due to the downstairs tenant angry about how the landlord was treating her friend who rented the upstairs unit.

According to Selim, both complaints were fueled by tenants desire for ‘revenge’ against him.

He also believes both reports were made in bad faith.

There were 380 reports against unregulated suites in 2011.   They continue at the same pace in 2012.  When the rules are enforced, landlords are essentially helpless to do anything.

The situation even frustrates the head of the Calgary compliance branch.  City staff are often used by angry tenants as tools of vengeance instead of being contacted out of real concern for safety or health codes.

What is the Government Doing About this?

Calgary mayor Naheed Nenshi has attempted to get City Council to relax secondary suite bylaws.  However, so far he hasn’t been successful.

According to Mayor Nenshi:

“They’re not the most unsafe ones, or the most dangerous ones, or the ones that are causing the biggest problems in the neighbourhood. They’re the ones people complain about for one reason or another.”

“And so, yet again, the system is ridiculous. We’re pretending we’re doing something about the situation, when all we’re doing is addressing a tiny fraction of the problem, based entirely on whether you have an angry tenant or angry neighbour.”

Next week council will discuss possible alternative ways  of enforcement.  However, council is split on the issue and the Mayor’s allies predict nothing will change prior to the next election.

So Why Don’t Landlords Simply Follow the Law? 

Ald. Andre Chabot represents an east end ward which has traditionally had most of the citys unregistered secondary suites.  Chabot states he will push for tough enforcement policies which are not only based on tenant or neighbor complaints.  According to Chabot,   “If you’re going to have two suites in a house, you should be paying increased taxes.”

However, rezoning a property to be legal under the legislation is not only costly and complex, politicians get the ‘final say.’   In 2011 eight homeowners applied to make their properties legal. Three were refused.  Those voting them down included Chabot.

According to Selim, it’s so complicated he will avoid the process and instead apply to construct a proper new duplex on his large lot!

Landlord Gizella Heiter also states she won’t bother trying to follow the government rules by rezoning.  She had an unhappy tenant call 311 to report the suite in her basement in 2010.

Heiter explains the inspector sent even complimented how nice the rental suite was…but it was still an illegal suite.

While the former tenant found another place to rent, Heiter now gets around the bylaw by renting her basement out without a kitchen.  According to the law if the basement doesn’t have a kitchen it isn’t illegal.

Heiter says she now rents to single guys who are happy with only a hot plate.