Do you like the idea of buying a house and adding value? A legal basement apartment will add value to your property and supplement your income.
In this blog, I’m going to dive into the essentials of creating a legal basement in Ontario, and I will share some insight and tips to ensure you attract the tenants you want.
Instead of having an unfinished space that’s nothing more than a storage area, why not make it a cozy apartment? Here’s why it’s a win-win situation:
Supplemental Income: A basement apartment will help offset mortgage costs and allow you to pay the mortgage down faster.
Increased Property Value: A well-designed basement apartment will be more attractive to buyers. In today’s market, income potential is one of the top criteria for buying a house.
Affordable Housing Solution: With so many rentals disappearing, you add more rental stock to the community. Maybe you plan to live multi-generationally, making your housing needs more affordable for you and your family.
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Navigating the Legal Requirements
Before jumping in with your tools and getting down to work, it’s crucial to understand the legal requirements. Here’s a roadmap to keep you on the right track.
Understand Zoning and By-laws: Every municipality has specific zoning laws. Some areas permit secondary units as a right, and others have restrictions. Be sure to consult the local planning department where the property is located. If you’re working with a realtor, it’s part of our job to assist you with this due diligence and confirm the zoning. It can also have a significant impact on getting financing.
Obtain Permits: Permits are mandatory when creating a new legal basement apartment. This ensures the construction meets the building code requirements. It also ensures the contractors you hire work above board. Always be present for inspections. Cutting this corner can lead to fines and other complications down the road.
Meet Building Code Requirements
Ceiling Height: Always verify with the local municipality, as it may vary. For example, in Toronto, the minimum requirement ceiling height in a basement is 1.95 m (6’4 3/4”) over the entire floor area. This can be challenging to find in older homes, but it’s essential not to overlook it.
Egress Windows: These are critical for the safety of the tenants as an escape in case of emergency. The type of windows required depends on the kind of exit the apartment has, whether shared or separate.
You can refer to the Province of Ontario website in the section for the second unit in your house. Diagrams and dimensions display the requirements.
Fire Safety: Per the building code, a 30-minute fire separation is required between units and between units and common areas. What is fire separation? It can be a floor, wall, door with a self-closing device, or a combination.
A fire separation can be reduced to 15 minutes if the whole house has interconnected smoke alarms. I always suggest to clients that the fire department come and look at the fire safety, as they have the highest standard.
Plumbing & Electrical: A licensed and insured professional should do all the work.
There are minimum plumbing requirements your basement apartment must have to be legal:
- A hot and cold water supply.
- A sink, bathtub or shower, toilet, or a drainless composting toilet in the bathroom.
- A kitchen sink.
Access to laundry facilities may be provided in a shared laundry room or a separate laundry area in the second unit (Pro Tip: A separate laundry is a great value-added feature).
To ensure you have adequate lighting in the basement apartment, the building requires that you:
- Have a light and switch in every room and space of your second unit.
- A switch at both the top and bottom of the stairs.
The electrical safety code, produced by Ontario’s Electrical Safety Authority (ESA), has further requirements for electrical work in basement apartments. You must get a separate electrical permit to do the electrical work in the second unit, and the ESA will need to inspect this work.
It is recommended that you hire a licensed electrician to perform this work. They can also get the electrical permit and arrange for the inspections. Note: Not having an ESA inspection certificate is a common problem when real estate deals fall apart. This will not only protect you from liability, but it will also protect your investment.
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Maximizing Tenant Appeal
As much as all the above is essential for a successful basement apartment renovation, don’t forget to create an appealing and functional space. Here are some ideas to consider for adding value:
Maximize Natural Light: A basement with above-grade windows is a detail that will garner more natural light. A full walkout basement will attract more natural light, but it often gives a better vibe of not being in a basement.
Open-concept Floor Plan: An open floor plan will make the basement apartment feel more spacious.
Soundproofing: Investing in quality insulation between units is a must, and you can thank me later. In my basement apartment, we insulated between floors with Roxul (now Rockwool) throughout all the floor joist channels… a game changer!
We did this because, at the time, we had a young son, and we didn’t want the tenants to hear him or the dog running around. Noise is one of the most popular objections for prospective tenants when viewing basement suites.
Contemporary Finishes: Here, you need to understand what type of tenant you want to live in the space. Based on your finishes, I cannot emphasize the premium you will get in rent. Quartz countertops, vinyl strip flooring, and stainless-steel appliances will attract the best-quality tenants.
When someone lives in a lovely space, they are likely to stay. It’s not that the apartment won’t turn over, but it won’t do so as frequently. Also, it’s less likely that you will have extended periods of vacancy.
Work With a Realtor
When building a basement suite, it is beneficial to work with a realtor who understands all the processes and steps necessary for success. Working with someone who has been where you want to be will provide you with the kind of insight and value other real estate professionals can’t. It will save you time, stress, and money.
If you have any questions about properties with legal basement apartments, don’t hesitate to get in touch with me.
Looking to buy your first home? I can help. Get in touch with me at 647.283.2127 or send me email at stuart@stuartnodell.com.
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