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Having been a real estate investor in Calgary now for over 15 years, there’s always a strategy that I keep coming back to that provided me with success over the years. More recently, with the City of Calgary’s initiatives to increase density in established neighbourhoods, they have made creating legal suites a great solution (for both landlords and tenants), and lenders have also done the same.
In particular, suited homes have found a sweet spot, with two rental units under one roof, allowing for easier maintenance / management and spreading of vacancy risk across two units as opposed to just one. We’ve all heard of market diversification before, and this is not dissimilar in diversifying the rental income stream.
I was chatting with a lending colleague of mine, and she provided some great insight into how lenders are supporting investors with certain lending programs that make this a no-brainer investment.
One financing option that can be particularly effective for buyers and investors is a purchase + improvements program. This program allows buyers to finance both the purchase of a property and eligible renovations under one mortgage, with improvement funding of up to $150,000.
It can be used for general home upgrades or to add a legal basement suite, provided no structural changes are required. When a basement suite is added, projected rental income may be used to help offset renovation costs and improve mortgage qualification.
For investment purchases, the property must contain two self-contained suites, and a 20% down payment is required. The improvements themselves are flexible and can include kitchen or bathroom renovations, flooring and window upgrades, furnace or air-conditioning replacement, roof repairs, electrical updates (including knob-and-tube replacement), basement finishing or waterproofing, septic upgrades, decks or patios, and the addition of a rental unit.
Overall, this program is well-suited for buyers looking to improve livability, add rental income, or enhance long-term property value at the time of purchase.
For more details, reach out to book a call to see how this can work for your investment portfolio.
