How a Laneway Home Can Help Maximize Your Home’s PotentialFebruary 9, 2021
The laneway homes construction has rapidly been gaining in popularity throughout Vancouver and the Lower Mainland. Many municipalities in BC are now actively encouraging laneway home construction, making it quicker and easier to obtain the required building permits.
But as a homeowner, is the investment worth the return?
There are several arguments that can be made in favor of investing in laneway homes construction; laneway homes offer a slew of benefits to communities and neighborhoods suffering from housing shortages, by offering an alternative housing option while providing homeowners with an additional source of income. Let’s cover the main benefits in further detail.
For renters, laneway homes provide:
An Affordable Housing Solution
In a supply and demand market, the lack of inventory has driven housing costs in Vancouver to record highs, particularly for detached homes, making affordability a huge issue for the average family. With a shortage of new land to build on, homeowners choosing to build a laneway home are providing much needed real estate where it would otherwise be nearly impossible to build.
An Answer to Population Density
One reason we have such an overwhelming shortage of affordable housing in Vancouver and surrounding areas is simply due to population growth. Movement from suburbs to the city, as well as strong immigration, have all contributed to making the Lower Mainland a bustling, vibrant community, but have also intensified an already difficult housing situation. Laneway homes afford individuals and families the ability to live in the same communities in which they work.
But it isn’t only renters who stand to benefit from laneway homes construction; there are many significant advantages to homeowners as well:
Increases the Value of your Home
A typical laneway home costs in the area of $300,000 to build, but adds significant value to the resale price of your home, as laneway homes are in-demand, sought after commodities to most homebuyers.
In some areas, laneway homes can be sold independently of the main home, with some going for over a million dollars.
Provides Excellent Income Opportunity
An average 600 square foot laneway home in a popular urban area could rent for as much as $3,000/month. Based on a build cost of $300,000 and factoring in the minimum down payment, your mortgage payments would be in the area of $1,600, netting you close to a 100% ROI.
Could Offer an Alternative Downsizing Option
Savvy homeowners looking to capitalize on their investment and downsize at the same time could take advantage of a laneway home for their own personal use. Downsizing from a larger home into a laneway home, while renting out the main home instead of selling, could provide a sizable income stream.
Keep Extended Family Nearby
Whether it aging parents or grown children who have not yet entered the housing market, a laneway home could provide the ability to keep close family members nearby, while allowing each to maintain their individual space.
A common misconception is that laneway home construction detracts from the aesthetic of a neighborhood. However, the opposite is actually true. Laneway homes are built to complement the existing home, and can significantly add to the curb appeal. In addition, laneway homes can make the alleys behind homes safer, cleaner, and more appealing for all those who live in the area.
It would appear that laneway home construction is a win-win situation for all those involved. They provide much needed rental stock in a market desperately in need of quality housing, by better employing otherwise under-utilized space. For homeowners, an investment in a laneway home provides freedom in choosing how to use the space, all of which provide a positive ROI.
Ready to build your Dream Home?book an appointment