The Ottawa market has a lot of ways to make money in Real Estate, and there ARE ways to get in on an entry level. A very good way any people have made sizeable chunks of cash have been to use their principle residence as the tool. Now some people have simply bought and held, some have built and held, some buy and reno and hold. Notice HOLD is always there? You can’t just buy and sell right away or CRA will ding you for their cut sooner than later.
The big idea I want to explore to is to find/build a nice home where you can live for a few years that has some potential to use some of the space as a rental suite or a “secondary dwelling” as the City defines it. Either you can have a nice good sized home that has a walk out basement and you use a significant chunk of the lower level as a suite – complete with 1 or 2 bedrooms, at least 1 bath, laundry and a kitchen and all. Keep a part of the basement for your own use- maybe a home theater or rec room for the kids. The walk out basement lends itself to nice big windows, a full and proper entrance. Now you can do this in a regular basement but be weary of the window size restrictions, and the entry can’t be on the front or in the home. The link to the City’s restrictions will be at the bottom.
The other good way would be to buy/build a nice big bungalow and use up to 40% of the gross floor area as a secondary dwelling unit. You could buy a big old 5 bed bungalow and do some remodeling which gives you 3 and quality in the basement with more room to use, and the other side could be a 2 bed with a great sized basement.
Now in our market we have 2 huge demographics. Baby boomers/empty nesters/snow birds and their kids – Gen X’ers (me…and maybe you too). Think about it….The former group needs a smaller space, likely wants to sell their principle residence for tax free money and live off it/invest it, pay a modest rental fee around home and spend some good time wearing white belts and golfing in Florida. Great tenants!
Many people my age are in relationships and still working very hard at their careers, not necessarily starting families yet. This group of young professionals need a place to live for a few years to keep immediate costs down where they can focus on building that foundation. Great tenants!
Both groups also want a quality space they can be proud of, and are willing to pay a fair market rent for it.
This rent pays down your mortgage faster, and you get to sell your home down the road and pocket tax free money, OR you could keep it and pull out some money to use as a down payment for another new home and KEEP this place and rent out BOTH sides.
Now you’re cooking with gas.
Where do you start? How do you go about financing a project like this? How do you develop a project like this?
Email me at mevans@evanselattar.com and I’ll tell you. I also have a FREE investment seminar coming up in a few weeks with featured lenders and developers.
For rules that will likely apply visit http://ottawa.ca/en/residents/laws-licenses-and-permits/laws/city-ottawa-zoning-law/zoning-law-2008-250-consolidation-60 and http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/rsdnc/menu-eng.html
For ideas on how to make money buying pre-construction, developing other entry levels of real estate or even converting residences to multi unit buildings – keep an eye on the blog.
The Evans Real Estate Group Blog 