My elderly parents have lived in their home for decades, and want to stay there for as long as they can. It’s a detached home with an unfinished basement. My wife and I want to finish the basement and move in so we’re available to help, though we dream of retiring to the east coast eventually. Should we plan a standard reno with a bedroom and a bathroom, or go through the trouble of making it a legal one (or two) bedroom apartment? – WEIGHING THE OPTIONS
DEAR WEIGHING: Each season of life brings new changes, and it’s great you are able to accommodate these within your family. It sounds like your parents are happy in their home and enjoying their retirement lifestyle. The assistance they need to continue aging in place could range from grocery shopping and yard work to full-blown nursing care. Being close by, you can help meet these needs as they arise. With this in mind, finishing the basement makes good sense from a personal and property ownership perspective.
Deciding how to approach your renovation is a financial decision as much as it is a personal one. Given the needs of your family, the local housing shortage, and the rising cost of home ownership, a legal basement apartment could be a great opportunity. Start by calling in a trusted contractor and your local building department to see if creating a legal basement apartment is possible. If it is, it’s practically a no-brainer.
In our region and across Canada, the demand for homes is growing faster than we can build them, especially when it comes to affordable options. Legal rental units are in high demand, and it’s quicker and less expensive to finish a basement apartment than it is to build a whole new house. When it comes to real estate, I always encourage my clients to think in terms of their exit plan, whether they’re first time buyers or nearing retirement. If you hope to retire out east one day, this home could be part of the equation. You might retain it and rent out two units instead of one, or sell it knowing there will always be a demand for a property with a legal mortgage helper in the basement.
If we compare two nearly-identical houses, one with a finished basement and one without, the finished basement adds value – but there’s a difference between value and income. The ability to generate a couple thousand dollars each month will increase the value of a property far beyond a rec room and an extra bedroom, especially as home prices and carrying costs continue to rise.
PRO TIP: Sometimes decision-making comes down to math. These days, about 60 percent of detached homes have a finished basement, and that percentage will increase as zoning relaxes to meet the housing shortage. If you could finish the basement for about $75 thousand, or add a legal one-bedroom apartment for about $125 thousand and generate $2,000 worth of income each month, the decision would be simple. Not every basement is suitable, but creating a legal rental unit allows you to be there for your parents now, and make home ownership more affordable for someone else in the future. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.