You are developing your basement to increase your cash flow and the value of your house. You may even be a part of the affordable housing solution for Calgary. No matter what the reason is, E3 Construction will work with you to create the basement suite that will achieve your goal.

Increase Cash Flow

Depending, of course, on location, size, and level-of-finish, a secondary suite can generate between $800-1200 a month. That is over $10 000 a year of extra money, all for sharing your unused basement with someone else. This will be made possible after E3 develops it.
Learn More

• As of March 12, 2018, the City of Calgary has made it easier to apply and be approved for a secondary suite within your home. Now the approval process for a development permit can be through a city counter or online, rather than applying through the City Council as reported by the Calgary Herald.
• Developing your basement to include a legal basement suite, can allow you to reduce the amount of interest you pay on your own mortgage. According to the numbers shared by the Globe and Mail, with a $310,000 mortgage amortized over 25 years at an interest rate of 3.44 percent, homeowners can expect to pay at least $151,381 in interest alone, and the interest rates look like they will only increase! However, if you are able to take the $800 in rent from your basement suite, and apply it directly to your mortgage, you can save $71,598 in interest! With the average house price in Calgary higher you will only increase your savings with the rent from your secondary suite paying down your mortgage faster.
• Including a “mortgage helper” or basement suite in your home has significant financial benefits for you as a homeowner. Developing your basement into a legal secondary suite allows you to deposit the $800-1200 a month from rent directly towards your mortgage. This would let you pay off a 25-year mortgage in 14 years if mortgage rates remained stable! What would you do with your life, if you were mortgage free?
• An alternative to a traditional long-term lease agreement would be to enter the short-term rental market with a listing on Airbnb or HomeAway. A recent study by the City of Calgary found that the average short-term rental was rented for $100 a night, with 44% rented for 90 or more nights a year. Renting your basement suite for at least 90 nights nets you an income of $9,000 annually, without having the added pressure of a renter for the other 275 days of the year.
• With the extra $800 a month that your basement rental provides, you could invest that money in the futures of those you care about. Investing only $400 of your rental income in an RESP for your children over the next 10 years would allow you to save over $64,000 for their education.
• Approaching retirement, you might be wondering how to pad things out financially so you can enjoy your retirement instead of stressing about money. Many retirees no longer need the full space of a home, so renovating your basement to create a basement suite makes sound financial sense. The added income from a rental unit allows you to relax while maintaining a passive income of at least $9,000 a year. You could even take the whole family to Hawaii every year for that amount!

Increased House Value

Developing your basement for personal use will only get you back between 60-80% of what you spend on it. However, secondary suites are the exception. When buyers go to the bank for a mortgage, a legal secondary suite is not an expense but is an added source of income. With that additional income, they can access a higher mortgage and can afford to pay you more. That’s added value to for you.
Learn More
• When your bank is negotiating your mortgage, 100% of the income from a basement suite can be applied to your total income, causing you to increase your total projected income by approximately $10,000 annually. RateHub’s mortgage affordability calculator estimates that with an annual income of $80,000 you can qualify for a mortgage of about $500,000 However, if you factor in an extra $10,000 from your basement suite income, your mortgage affordability is now capped at $564,000. That makes a big difference in Calgary’s housing market!
• If you develop your basement with E3 into a welcoming secondary suite
similar to Expected Basement package finishes but meeting the required city of Calgary building code for secondary suite, your property value will increase also. When you factor in a monthly rent at a reasonable $800 ($9,600 annually), you stand to have your basement renovation paid off in a little over 5 years. After that, everything you make will be cream!
• Basement suites on average cost an extra $15,000-$25,000 over and above the cost to develop your basement for personal use. Which feels like a lot of money, designing your secondary suite to mid range finishes which helps you find quality tenants can bring the investment around $70,000. But if you are earning $9,600 annually of this investment. That is 13.7% return on your investment, where else can you earn that level of return?

Keeping It Separated

Sure you would love to help provide affordable housing, but you don’t want a stranger in your house. A legal secondary suite puts a locking door between your space and theirs. Also, with an insulated ceiling and 1 3/4″ solid door at the suite entrance, you may not even notice they are there, except when the rent is paid every month.
Learn More

• The City of Calgary has promised a 2-year period of amnesty for homeowners with illegal basement suites to bring their secondary suites up to code. This amnesty includes waiving the fees for secondary suite applications, as well as the $232 registration fee, saving about $700 in application fees.
• A legal basement suite has several safety features, for both you as the landlord and your tenants. Egress windows ensure that everyone can exit the building safely in an emergency. Smoke alarms and carbon monoxide detectors in every unit ensure that everyone in the house is aware of a fire, and can respond appropriately. An outside exit that can be accessed from the basement suite makes sure that individuals do not become trapped in the basement during an emergency. These measures allow you as a landlord to operate a safe rental suite, eliminating the stress of what happens if everyone cannot get out of the house in an emergency.

Affordable Housing

Let’s face it, Calgary is expensive. Remember when mortgages were only $600 per month? No, neither do I. It’s hard to scrape together a down payment, let alone make the monthly payments. A secondary suite helps both you and your renters. Your renters get a nice place to live, and you get an affordable mortgage.

• The City of Calgary in partnership with the Canada Mortgage and Housing Corporation published the report Housing in Canada’s Big Cities in 2018, indicating that at least 22% of households in Calgary spend more than 30% of their income on rental costs. In this report, it was revealed that Calgary has the highest income inequality among the big cities. By developing an affordable basement suite in your home, you can impact the tides of your community, and provide affordable housing for those in need. You could be a super-hero for a family in need, without even needing to leave your house!
• The average rent for a two-bedroom apartment in Calgary according to Rentfaster was $1245 a month. In contrast, a two-bedroom basement suite could be rented for an average of $980 a month. The savings of $265 a month for a family that is struggling to make ends meet is substantial. Putting that extra money back into the hands of the individuals who need it the most, could be the difference necessary to ensure that everyone can have 3 meals a day instead of 2 or even 1.