How To Have Someone Else Pay Your Mortgage – Buying a Home With An Income Suite
Paying monthly mortgage might be a tough task for many individuals. With the prices of real estate, there are instances where people are unable to qualify for mortgage payments, and they are left deprived of buying their dream house.
However, there are ways to cut down your mortgage payments by a significant amount by having someone else pay for it. The easiest way to do so is by buying a home with an income suite. Rental income from an income suite can become an additional source of earning for you, which can help with mortgage payments. They can also help you pay off your mortgage much earlier than you be able to with just your primary income.
Income Suites and Their Benefits
Although buying a suited home may initially raise the price of your initial investment, the benefits that it provides are sure to offset the additional investment fairly quickly.
In some cases, houses with income suits help you qualify for larger mortgage payments so that you can afford a bigger home, which initially seemed out of your budget. Sellers are often more comfortable with investors who will rent out the income suite as they have an additional source of income to pay for their mortgage. It raises the amount of mortgage that you can qualify for.
Secondly, suited homes are in demand because it increases the resale value of the property. There are a lot of people who want to buy modern homes with basement suites because they can rent them out. If your house didn’t have one previously, adding a legal suite into it significantly drives the value of the property up as it now contains two living units under one roof.
Another benefit of income suites is that it provides families to keep close. Many people choose to rent out the suite to their loved ones. In this way, they can live in close proximity with one another while still having their own space and privacy.
Adding an Income Suite to Your Home
Adding an income suite to your house can seem attractive. However, you need to consider a few things before you do so. Firstly, the suite that you plan to rent to tenants must be self-contained and meet all the legal regulations and construction codes.
The income suite must also have a separate entrance, a kitchen, a sleeping area, and a living area. The only things that can be shared are hallways, laundry rooms, and parking areas.
You should also evaluate the costs associated with the rental suite. Over time, you will have to invest in the maintenance and repair of the rental space. You will also be required to pay property taxes and insurance premiums for it. Thus, accounting for all these costs against the expected income is important to decide the profitability of the suite. However, there is also an added advantage of tax deductibles in these expenses, which can prove fruitful for you.
It is crucial for investors to do their research regarding the neighbourhood they are planning to buy the suited home. You should also assess the average rent payment in the area and other amenities offered by landlords to their tenants. It will help you decide whether your income suite will be competitive and attract good tenants, or you need to make some changes.
Applying for Your Mortgage
We recommend checking with the mortgage provider or bank about their restrictions regarding rental incomes. Some banks accept mortgage payments from 100% of rental income, other banks only accept a percentage of it. It might affect your affordability of the higher mortgage.
You might have a higher cost in creating the income suite, which will not be quickly offset by the total rental income it generates. Try to consult a financial advisor who will be better able to advise you on profitability matters.
It is also important for you to consider if being a landlord is cut out for you. Being a landlord comes with many additional responsibilities which, not everyone is suited for. You have to take care of your tenants and their needs and incur the expenses that come with it. However, if you believe that it will help you pay out your mortgage, then income suites are the way to go.