The Vancouver housing market has seen its share of ups and downs. For those lucky to have purchased a number of years ago, your home has appreciated significantly but how can that equity help your bank account and not just on paper? For many in the city of Vancouver, the answer to that question is a laneway home.
A laneway home provides many benefits to the city, the tenant and the owner of the home. The city receives the added supply of rental units while preserving the existing streetscape and character of individual neighbourhoods. The renter can benefit by the opportunity to live in a detached, ground-orientated home in an area that may have been too pricey to rent a single family home. The owner of the laneway home would instantly add more space for elderly parents looking to downsize or adult children wanting to live independently but if rented, the income stream provided would help many owners with their monthly expenses. A quick look on the internet you can find rents from $1,000 to $2,500 depending on the square footage, number of bedrooms and location. Construction cost for a laneway home are in the $150 to $250 per square foot range. With these figures in mind consider the following.
A 500 Square foot Laneway home at $200 per square foot = $100,000.
Mortgaging $100,000 for 20 years at the rate of 3.55% = $581.20 per month
Rental income from laneway $1000 + per month
Sounds like a great idea and want to know the next steps? A phone call to a local Vancouver contractor who specializes in laneway additions and new home construction would be the next step. This call will help you find out whether your property is suited for this type of project, along with the associated cost and timeline. Once it has been determined that a laneway home is possible, speaking with a Mortgage Professional will help determine the best option to access the equity of your home to fund the construction.
With the right Vancouver contractor and your financing in place, let the laneway home construction begin!