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Adding a rental unit to your home

Get your house working for you by building a granny flat or basement apartment.

basement bedroom 218 Howard Park Avenue
basement bedroom, 218 Howard Park Avenue

With recent economic uncertainty and job losses, coupled with rising house prices in some parts of the country, it's little wonder people are looking closer to home, or, more specifically, at their home, as a means to generate income. Turning a primary residence into a partial income property by adding a suite or basement apartment is a popular option for homeowners, but doing it right requires expert advice and a hefty investment.

One of the biggest draws is being able to supplement your mortgage payments. "We see it a lot with first-time buyers because it allows them to afford a bit more house," says real estate insider Jennifer Palacios, a member of the Julie Kinnear Team in Toronto. However, she stresses that projected income from a rental unit isn't factored in when applying for a mortgage and won't increase the amount for which you qualify.

"It's a convenient additional income for any homeowner," says Ivan Koval, president of, a southern Ontario contractor referral service. He says the request for self-contained units in single-family homes has risen steadily since July 2000, when the City of Toronto's second suites bylaw came into effect.

Prior to this, there were plenty of basement apartments and such out there, but they weren't considered legal. The new bylaw allowed for second suites in all single-detached and semi-detached houses throughout the city, as long as they complied with certain conditions.

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