6 Reasons to Add an Income Suite In Your New Home
A lot of people are becoming interested in purchasing income properties. We’re seeing this trend in the new construction market, with more and more customers deciding to add an income suite to their new home.
Income suites work well for certain types of home buyers. Learn more about the advantages to see if this might be something that’s right for you.
1. Pay Your Mortgage Faster
Of course, the biggest incentive to add an income suite is to make your mortgage more affordable. Rental income is not guaranteed, so you’ll have to qualify for the home purchase on your own, but once you have a tenant, you could be increasing your mortgage payment by $1,000 a month or more.
Putting extra money toward the principal balance decreases the amount of overall interest you pay for the term of the loan and shortens your time frame. In fact, if you were to consistently pay an additional $1,000 on a $350,000 mortgage, you could fully own your home more than ten years earlier.
2. Build Equity
Even if you don’t care about paying off your mortgage quickly, it’s nice to think about the ways that an income suite can build equity in your home. Young professionals, for instance, often hate throwing money away on rent but aren’t yet ready to buy that spacious single-family home. In this case, having a rental suite in a new townhome would allow you to drastically increase your equity. When it comes time to settle into a larger home with a family, you’ll have more money to go towards the down payment.
3. Make Your Budget More Flexible
Rather than thinking of the rental income as money you pay on top of your regular mortgage, you could think of it as money you’re saving on your monthly payment. For instance, if your monthly mortgage payment was $2,000 and your rental property earned you $1,200 a month, you’d only have to pay $800. That frees up money in your budget for things like vacations or entertainment.
4. Boost Your Home’s Resale Value
You’re probably planning on spending a few years in your new home, but when it comes time to sell, having an income suite can increase the home’s value. Buyers like to have the option of reducing their mortgage costs with an income suite. Other people simply like having a finished basement area to use for other purposes. The more livable space in your home, the higher the value.
5. Create a Comfortable and Affordable Home for Aging Parents
Not everyone wants to have a stranger living in their home. Many choose to use in-law suites as a way to create some private living areas for multigenerational families. While every family is unique, some parents do pay money to live in the suite. Others offer to watch the children, saving the parents money on childcare costs. Those who choose to do this typically love that the arrangement creates close bonds between grandparents and grandchildren while contributing to mortgage payments.
6. Give Yourself More Options for the Future
No matter how it’s designed, additional living space in the home is beneficial. You may not want to have someone renting out space forever, but by adding a finished basement in the original home build, you’ll be saving yourself the cost of a remodel several years down the road. Renting the suite may make sense now, but in the future, you could turn the space into a guest suite, a man cave, or a fun playroom for the kids you hope to have. Adding a suite doesn’t limit the functionality of your home. It creates new possibilities.
Having an income suite isn’t the right choice for everyone. You’ll still have to act as a landlord – collecting payments, making repairs, and handling any tenant issues. However, if you think you can handle some of these inconveniences, an income suite can make your home a lot more affordable.