Are you a homeowner in Toronto looking to enhance your property’s value while capitalizing on the city’s real estate trends? If so, building a garden suite might be the answer you’re looking for. Garden suites, or accessory dwelling units (ADUs), are secondary housing units built on the same property as the primary residence. Not only can these tiny homes provide you with extra rental income or living space, but they can also significantly increase the overall value of your property.
In this blog, Densecity will guide you through the ins and outs of investing in developing a garden suite in Toronto and essential factors such as bylaws, regulations, permits, and more.
Benefits of Building a Garden Suite
The benefits of constructing a garden suite are far-reaching and impactful, making them attractive for homeowners and investors. They include:
Additional Source of Income
Garden suites present an opportunity to generate a steady stream of rental income. The high demand for affordable and well-located housing in the city positions garden suites as a sought-after choice for renters. Adding a garden suite to your property allows you to tap into this demand and enjoy the financial rewards of a reliable income source.
Short Term Rentals
Travellers coming to Toronto often seek accommodations that blend comfort, convenience, and a sense of home, which garden suites can offer. Hosts can offer amenities such as a fully equipped kitchen, a cozy living area, and a dedicated outdoor space. Platforms like Airbnb and Booking.com provide an interactive setting between hosts and potential guests. The ability for guests to leave reviews and rate their stay plays a vital role in maximizing your gross rent.
The demand for unique and comfortable short-term accommodations continues to grow, making garden suites a prime asset for homeowners looking to capitalize on this trend. Toronto is a great place to become a host as the city holds many summer events and festivals that bring tourists worldwide. This gives hosts the ability to generate high revenues from short-term rentals.
Properties evolve as our needs change over time. Whether accommodating a growing family, providing space for a home office, or hosting visiting guests, garden suites offer a versatile solution. These self-contained units can be designed to cater to a wide range of needs, enhancing the overall functionality of your property and adapting to your evolving lifestyle.
Expanded Buyer and Tenant Pool
Investing in a garden suite can significantly expand your potential buyer and tenant pool. With diverse unit types — detached, garage-converted — you can cater to various preferences and living arrangements. Young professionals, multigenerational families, students, and remote workers represent potential occupants who can benefit from garden suites’ unique living spaces.
Privacy and Autonomy
Garden suites offer a level of privacy and autonomy that can be particularly appealing. These separate living spaces allow occupants to enjoy a sense of independence while remaining close to the main property. This balance between personal freedom and proximity is a feature that resonates with many renters and buyers in today’s market.
Living in condos and apartment buildings often comes with several hassles related to communal living. One of the prominent challenges is the frequent inconvenience of dealing with elevators. Waiting for elevators during peak hours can be frustrating and time-consuming, leading to delays in getting to and from your unit.
Another common issue in these settings is the unpredictable nature of fire alarms. False alarms or alarms triggered by minor incidents can disrupt residents’ daily routines, causing unnecessary evacuations and annoyance. The rush hour congestion in underground parking lots of condos and apartment buildings can be a significant headache. In contrast, those occupying garden suites can rest easy as they don’t have to deal with the above problems. As for parking, you may choose to allow your tenant/guest to park on the property, or they can obtain a city parking permit
Adding to Property Value
One of the most compelling advantages is the potential for substantial increases in property value. Garden suites don’t just enhance your property’s appeal; they can significantly contribute to its overall worth. As you invest in designing, constructing, and maintaining a well-appointed garden suite, you’re simultaneously investing in the long-term appreciation of your property’s value.
Navigating Toronto’s Bylaws and Regulations
Garden suites can be constructed on residential-zoned properties within the city. However, not all properties meet the eligibility criteria. To determine eligibility, a critical initial step involves assessing the distance between the intended garden suite location and the nearest fire hydrant, requiring a proximity of 90 metres maximum. Moreover, in cases where the existing property lacks a driveway leading to the designated garden suite area, a minimum space along the property’s side is necessary. This width must be at least 90 cm, as established by emergency services, and accommodate essential access, allowing paramedics to efficiently reach the garden suite and transport individuals on a stretcher. Neighbours who share a mutual walkway can get into a limiting distance agreement. This would be an option for neighbouring properties with mutual walkways or access that meets the minimum requirement of 90cm, but neither owns 100 per cent of this needed space.
While the benefits are clear, it’s essential to consider the financial aspects of developing a garden suite. Initial construction costs vary based on design complexity, materials used, and local labour rates. However, these costs can often be recouped through rental income over time. You should carefully assess your projected rental income using local market prices and demand. Evaluating the return on investment (ROI) is crucial to understand how long it will take for the additional rental income and increased property value to offset your initial investment.
Steps in Garden Suite Construction: Transforming Vision into Reality
Embarking on constructing a garden suite is an exciting endeavour that promises enhanced property value and new possibilities. The journey unfolds through several essential steps, each contributing to the successful realization of your project.
Thorough Property Assessment: The first crucial step is a comprehensive evaluation of your property’s potential. Factors such as available space, zoning regulations, and property layout are pivotal in determining the feasibility of adding a garden suite. This assessment sets the foundation for the entire project, ensuring that your vision aligns seamlessly with the practical aspects of your property.
Collaborative Design Planning: Enlist the expertise of architects and designers to craft a layout and design that harmoniously integrates with your property’s existing aesthetics. From ensuring optimal space utilization to selecting materials that resonate with your property’s style, this stage transforms your vision into a tangible plan that balances form and function.
Navigating Complex Permits: The regulatory landscape can be intricate, making the guidance of professionals invaluable. Obtaining the necessary permits involves understanding local zoning laws and adhering to building codes. Seeking expert assistance streamlines this process, ensuring compliance and minimizing potential delays.
Contractor and Supplier Selection: The heart of your garden suite project lies with contractors and suppliers. Choose experienced professionals who understand the nuances of garden suite construction. Their expertise ensures that your project is executed efficiently, adhering to high building standards.
Quality Control and Monitoring: Meticulous monitoring is essential throughout construction. Regular site visits and open communication with your contractors help maintain the quality and integrity of the work. This step safeguards against potential issues and ensures that your garden suite meets or exceeds your expectations.
Navigating the Legalities
As a garden suite owner, you must manage legal aspects such as lease agreements and tenant management. Having well-drafted lease agreements in place can protect your interests and provide clarity to tenants. Understanding the tax implications of rental income and any potential rental income’s tax implications and insurance coverage safeguards your primary residence and the garden suite.
Like any investment, building a garden suite comes with challenges. Construction delays can occur due to various factors, so preparing for potential setbacks is essential. Market fluctuations can affect rental demand and property values, so contingency plans are wise. Addressing tenant or property management issues promptly and professionally is crucial for maintaining a positive investment experience.
Investing in developing a garden suite on your property can be lucrative, adding value to your property and providing financial opportunities. By thoughtfully navigating the bylaws, regulations, and economic considerations, you can embark on a flourishing garden suite project. Do your homework, work with experts, and be flexible with changing market conditions. With the right approach, a garden suite can unlock your property’s full potential, offering benefits for years to come.