By: Brian Banks – FreedomVest Properties
Owning a property with a secondary income suite can be very powerful and catapult your financial future. It doesn’t matter if it’s a newly built home with a garden suite or you convert the downstairs of an older bungalow into a basement suite; the benefits can be exponential. Here are the benefits of owning an income generating suited property.
The benefit I love the most — suited properties help home buyers qualify for a mortgage. For young couples just starting out, buying a home with a basement suite will help them set foot into the housing market. Basement suites generate revenue. As a result, lenders will factor this in as income on their mortgage application. The additional income will help offset the new mortgage payment, helping them qualify for a mortgage. The eligible amount of rental income applied varies from lender to lender. Lenders have their own set of guidelines to follow. Ask a member of The Biggar Team for more details.
When homeowners move into their new home and start living, the basement suite’s rental income dramatically reduces living expenses. A huge financial load is lifted off your back when just starting out and establishing a monthly budget. Having a good portion of your monthly mortgage payment covered by your tenant client (YES — it’s a business) is a significant help for most homeowners. Ultimately, you can choose to spend the money however you want to. Maybe you put it towards your mortgage payment, buy new furniture or take a vacation every year. It’s up to you, and that’s pretty cool.
Income suites increase your property’s value. When comparing a single family home with a finished basement to a home with a basement suite, the value is usually $25k+ higher. When fully rented up and down, the revenue doesn’t just cover the property expenses, there’s a surplus of rental income called “positive cash-flow.” That’s right; they make money! Investors see good value in suited properties.
If you were to add a basement suite to your existing home yourself, you can tap into and access those value gains by refinancing your mortgage. You force up the home’s value through renovations, increasing your equity in the property. Depending on what you owe, you can refinance the property and access that equity in the form of a Home Equity Line of Credit (HELOC) or a mortgage. You then have access to more funds to do it all over again.
Whether you’re a first-time home buyer or a seasoned investor, buying a home with a legal basement suite or developing a suite yourself, is a smart move financially. They help you qualify for a mortgage, generate revenue and increase a home’s value. This approach to homeownership is foundational to setting up your life for success.
FreedomVest Properties specializes in developing legally suited houses. We provide turnkey, passive income producing properties to those that don’t have the time, knowledge or desire to do it on their own but want to leverage the power of real estate. Diving in alone can be scary and we try to eliminate all those fears that are holding you back by doing it together.
Don’t hesitate to reach out and get in contact with us. We want to impact lives and help people secure their financial future by investing in their freedom through real estate. You can check us out on Facebook at our page FreedomVest Properties or email us at email@example.com for more information today.