Page 27 - Real Estate Now Sept-Oct 2021

a lower return on investment the longer it sits vacant. The costs to maintain a single-family home can be higher, and
when the house sits empty those costs can quickly add up.

Pre-construction

With new developments popping up all over the country, buying pre-construction properties (either homes, condos,
or apartments) can seem enticing. It’s easy to find the big pros for this type of investment. The customization
allows you to create a space potential renters will find appealing. When you choose fixtures and finishes for a new
construction home, you can find options that are agreeable to most people without breaking the bank. Plus, newer
builds are more attractive to renters since they know things are in good working order and there likely won’t be any
repairs needed in the near future.
That being said, pre-construction comes with a unique set of cons some people just don’t want to deal with. These
cons can really be summed up into two words: the unknown. Your build could be unexpectedly delayed, leaving you
to navigate these financial waters without additional income. Your down payment could be up to 30% up front for
a new build, and it may not be complete for up to two years, which means you’ll be waiting a while to recoup that
money as well as start making any profits. You should always consider the type of tenant you’re looking for (students,
young professionals, growing families, etc.) so you can assess and align the property and neighbourhood with what
they’ll need and want.

Basement apartments
Basement apartments have come a long way in the last 10 years or so! They can be spacious, private, cost-effective,
exactly what young professionals are looking for as they save to buy their own home. Having a basement apartment
in your home shares a lot of the same pros (and cons!) as duplexes. They help pay the mortgage of the home you’re in
and you can write off a lot of the repairs since the space is owner-occupied. But it also means you’re living in the same
home as your tenants and you lose a portion of your home.

There are two additional cons to consider when it comes to basement apartments, though. The biggest one comes if
you’re adding a basement apartment to your home vs. buying a home that already has one built. Adding a basement
apartment requires money up front to ensure the space is up to code, not to mention any regional requirements (i.e.
permits, inspections). You also have to consider things like parking for your tenants, how they’ll get into their portion
of the home, etc. When it comes time to sell your home, not having a “typical” basement could affect your resale
value. You eliminate the group of people who aren’t looking to purchase an investment property, which could make
the home harder to sell.

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