According to the 2011 TD Canada Trust First-Time Homebuyers Report, one-third of first-time homebuyers in Canada are looking for a property with a rental unit.
Many homebuyers look for homes with a rental unit – such as a basement apartment or extra addition – to rent out for extra income in order to pay off their mortgage faster.
TD says that 71 per cent of first-time homebuyers in Canada looking for a rental unit would use the extra income to help pay off their mortgage as soon as possible, while 15 per cent would expect to live more comfortably but not put the money towards their mortgage. The remaining 14 per cent would use the extra income for savings. The TD Canada Trust First-Time Homebuyers Report polled 1,000 Canadians this spring who were planning on buying a home in two years or did buy a home within the last 24 months.
If you do plant to buy a home with a rental unit, it’s crucial that you have a home inspection conducted before you buy. You should have a home inspection done anyway, but if a basement apartment or other addition to your home that will be used for rentals is illegal, the cost to bring it up to code and obtain the proper permits will come out of your own pocket. In addition, screening future tenants properly is also important – there are far more laws protecting tenants than there are protecting landlords, even in their own home.
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