How Carriage Home Builders Add Value to Your Property

In a challenging financial and real estate environment homeowners are doing all they can to maximize the value of their investment; could a carriage home be the solution? Builders already familiar with the complexities of custom home development have brought their expertise to these smaller, auxiliary units, adding space and value to residential properties at a time when real estate prices are soaring, and inventory is dwindling.

A New Type of Mortgage Helper

In pricey Canadian cities like Vancouver mortgage helpers are nothing new. Homeowners have been using secondary suites, typically located on the garden level of their homes, for years as a means of bringing in additional income. What has changed is the location.

Sharing a primary dwelling with a tenant comes with its share of challenges. Even in the highest quality builds, noise transfer and acoustics can create tension. Furthermore, the loss of square footage is a concern, particularly for growing families.

But then, districts across British Columbia began easing restrictions on carriage homes, demand surged, and builders replied. Since 2009 over 4,500 laneway homes have been built in and around Vancouver with another 4,000 expected to be completed before 2028.

Carriage homes differ from conventional suites in that they are entirely separated from the primary dwelling. Typically located at the back end of the yard, these stand-alone homes range from 600 to over 1,000 square feet and are completely independent from the main home giving everyone ample privacy.

The Numbers Behind Carriage Home Builders

Building a carriage home is a significant undertaking, however the rewards can be substantial. Depending on a variety of factors, constructing a laneway house can cost between $250,000 to upwards of $400,000. This may seem like a hefty price tag, but in today’s real estate market, a 2-bedroom carriage home could fetch over $3,000 in monthly rental income.

Additionally, BC recently launched a Secondary Suite Incentive Program SIIP which provides homeowners 50% of the cost of building a secondary suite in the form of a forgivable loan up to a maximum of $40,000 provided certain conditions are met. To qualify, homeowners must agree to rent their units at the Rent Affordability Limit for their area. In Vancouver, for example, this rate would be $2,100 per month for a 2-bedroom unit. The loan is forgiving at a rate of 20% over 5 years after which all conditions have been satisfied.

Not only does a carriage home provide an opportunity for long-term passive rental income, but it also increases the value of your property, often over construction costs, contributing to an immediate positive ROI.

Other Considerations

While the short-term goal of carriage house building may be financial, these are not the only benefits of building a secondary suite on your property. With multigenerational living becoming more and more common, investing in a laneway house now could provide an ideal living situation for children or elderly parents in the future while generating rental income in the meantime. It’s a win-win situation: maximizing value and long-term security.