A rental income suite can be defined as a separate residence located within a detached, semi-detached or row house with its own living, sleeping, kitchen and bathroom facilities. While many suites are created through the development or conversion of a basement, other alternatives can include garage and garden suites.

What’s more, rental income suites — or secondary suites — are becoming increasingly popular among Edmonton homeowners and buyers looking to generate additional income and get started in the real estate investment business.

Here are the top 6 advantages of investing in a rental income suite:

Pay Down Your Mortgage Faster 

One of the most significant benefits of owning a secondary suite is the ability to offset your monthly mortgage payments…potentially by more than 50 percent!

For example:

$1,500 (average monthly mortgage payment in Edmonton)* –  $900 (average monthly rental rate for a one-bedroom (basement) suite in Edmonton) = $600.00

Not only will this additional source of income help you become mortgage-free faster, but it may also allow you to buy a larger, more expensive home. In this scenario, even if your monthly mortgage payment were $2500, based on the rental rate above, you’d still enjoy a near-average payment of only $1,600 a month. 

A Convenient Investment 

Homeowners or buyers who opt for a secondary suite on their property can look forward to generating additional income without the extra investment. While your secondary suite may require upfront capital, you don’t have to purchase an entirely different property to become a real estate investor. 

Enjoy Passive Income 

Secondary suites are also a great way to generate passive income: an additional source of earnings requiring minimal effort on your part. While you will need to take on the responsibilities of a landlord, a passive income stream will help you secure your financial future, alleviate stress and anxiety when it comes to mortgage payments (and other bills), and give you the freedom to pursue other financial ventures.

Always in High Demand 

Secondary suites aren’t just popular among home buyers. In Edmonton alone (not counting the greater capital region), 35% of the population are renters. A safe and legal suite is guaranteed to attract a variety of tenants, no matter where you live in the city.

Increased Property Value 

In the case of a basement or garage suite you’re taking an area typically used for storage (or other personal use) and converting it into an asset – adding instant value to your home. Income-generating properties also tend to be extremely popular among Edmonton buyers who, like you, are working toward financial freedom. For this reason, when it comes time to sell your home, you’re sure to enjoy a healthy return on your investment as well as an expedited sales process.

Tax Deductions 

As a landlord, you’ll also qualify for a variety of tax deductions, such as repairs and maintenance, insurance, property taxes, legal fees, utilities and more. The ability to write off many of these incurred expenses is a sure-fire way to reduce your taxable income and your tax burden.

The Terry Paranych Real Estate Group specializes in helping both beginner, and seasoned investors realize their real estate dreams. For more information, we invite you to get in touch. You’ll also receive the latest tips, tricks and advice on all things home related by subscribing to our newsletter below.  

*Average monthly mortgage payment calculated according to current home prices and mortgage rates in Edmonton via. 25-year amortization period and 5-year fixed term.

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