What is a legal secondary suite in Calgary?
A separate living area with a main residence. Examples are basement suites, above garage suites, “in-law” suites.
What is essential in a legal secondary suite?
The City of Calgary has excellent guidelines on its website, but here’s the short-and-sweet version. They must have their own sleeping, kitchen, living and bathroom within the suite. There must be at least one window in each bedroom large enough to get out of the building in an emergency (these are called egress windows, and the specific measurements are detailed on the City’s website). Each unit must have at least one exit to the outside. And each unit must have smoke/carbon monoxide detectors, connected to each other.
What else?
Secondary suites may have shared parking areas, shared laundry areas, and shared storage areas. Many tenants prefer to have separate areas for these spaces—great landlords will look for ways to provide separate spaces!
Why does this matter to me, the Real Estate Investor?
- Multiple sources of income. Rarely would both tenants leave at the same time.
- Higher income for the property. Specialized mortgage brokers can use the secondary suite’s income to help investors qualify for financing, or qualify at a better rate.
- You can use the extra income to pay down the mortgage even faster
- Generally legal secondary suites will improve property value, leading to better property appreciation over the long-term
- Tenants, buyers and neighbours can all verify that you have a legal suite on the City of Calgary’s Legal Suite Registry. This can make the suite easier to rent, and ultimately easier to sell to the next investor. Neighbours are generally happier when they see investors taking good care of a property, even though they don’t live in it. Personally, I NEVER underestimate the value of a happy neighbor!!
Did you know?
- A well-publicized University of Calgary graduate report, completed in 2015, found that only 2% of Calgary’s estimated 14,000 secondary suites were legal! It’s really not that hard to stand out right now—thanks to new city rules around legalizing these suites.
- Currently, the City of Calgary is offering an amnesty to the owners of illegal suites. This will end as of June 2020. Yes, it will be more work up-front to legalize suites in your investment property. But then, imagine how stress-free your rental property will be in 2020, when the City of Calgary starts enforcing the Secondary Suites rules! No panicked renovations for you: the smart (and wealthier) investor!
