Dreaming of a Carriage House? Here are Six Things to Keep in MindFebruary 9, 2023
Vancouver began greenlighting carriage house builders over a decade ago to combat a chronic housing shortage. But there’s more than more space that makes carriage houses attractive to homeowners.
Carriage houses-also known as garden suites laneway homes, or coach houses, are small secondary structures built on the same property as the primary dwelling. Historically, these buildings housed horse-drawn carriages, but today carriage homes are finding new purposes as mortgage helpers, retirement suites, or a place for grown children to live while saving for their property.
If building a carriage house is something you’ve been considering, here are six things you need to know.
Mortgage Rates are Affecting the Cost of Building a Carriage House
Many homeowners view carriages houses as a good opportunity to earn passive income while adding to their property value. But if investment purposes are the sole reason for wanting to build a carriage house, homeowners need to carefully weigh the time and cost of building against any potential return. A typical carriage house can cost between $300,000 and $400,000 and take builders approximately a year to complete, and with borrowing costs at a 20-year high, this could impact those requiring a mortgage to complete construction.
The rental Vacancy Rate in Vancouver is Below 1%
However, demand for rental units is also high and because carriage houses offer the privacy of a single-family dewing in neighbourhoods often dominated by high-rises, they are highly sought after and typically command a premium over similar-sized attached units. Consider a homeowner who finances the cost of building a 2-bedroom carriage home. Monthly payments of a 5-year fixed mortgage would be approximately $2,000; however, it could earn between $2,500 and $3,500 per month in rental income, depending on location.
Carriage Houses Add to Property Value
Because of their flexibility and passive income potential, carriage houses tend to add to the resale value of a home. In some cases, this increase is above what was invested in construction.
Carriage House Builders Need Permits
Like any construction project, building a carriage house requires permits. However, unlike building a primary dwelling on a vacant lot, permit approval for carriage house construction may require a few additional steps, depending on the location of your lot (a lot with or without lane access) and the intended size (single or two-story).
Once your district has approved your carriage house application, your builders can proceed with obtaining the required trade permits.
Some Districts May Allow you to Sell Your Carriage House independently of the Primary Dwelling
Current by-laws surrounding the sale of carriage houses independent from the primary dwelling vary. For example, in North Vancouver, your carriage house must remain an accessory to the primary dwelling. However, lots zoned for strata or duplexes in Vancouver may enable you to sell your carriage home independently.
A Carriage House is Flexible Use Space
The most significant advantage of building a carriage house is its flexibility. Rental opportunity is a widespread use for carriage houses, but some families may choose to build a laneway home for use as guest space, to provide grown children or aging parents a place to live independently, or even for their personal use while renting out the larger, primary dwelling. At some point, your carriage house will serve any or all these functions, the choice is yours.
No matter your reason for wanting a carriage house on your property whether it be for personal use, family use, or to rent – a carriage house is an investment with numerous benefits.
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