Buying a house with a rental suite sounds sweet…till it isn’t!
It was Monday morning. McLaren’s mortgage supposedly closed on Friday. Yet, he hadn’t heard from the lawyer since later Friday night. Thinking about the Friday that had just passed gave him anxiety. He knew the roller coaster was caused by something called a certificate. But what this meant to him remained a mystery until that Monday morning. Almost 3 days later.
It happens too many times in the industry. A client thinks it’s a great idea to purchase a home with a unit that they have been told can be rented. At Mortgage Suite we make sure that we ask the right questions first.
Who would think twice about buying a home with a mother-in-law suite, or a basement unit that has a kitchen?
Truly it is a great income stream. Rent it out and you can make extra money. This money can go toward your house bills. It could offset your mortgage payment. Even pay for your child’s education!
Before we sign however let’s avoid McLaren’s situation. Let’s make sure we ask the right people the right questions.
Always make sure to check the city and lender rules.
We need to before we go throwing our signature on an offer with no hesitation and extra rental income on the brain.
Two things: legal + safety = signing the dotted line.
- First things first. Is this a legal unit?
- Does it have its own separate unit number, and/or self-contained unit?
- Does the city recognize it as a separate unit?
- The lender will require this info in certificate form
- Is there a lease in place now?
- If legal, does it pass safety inspection?
- Check with your city about fire certificate
- Retrofit certificates
- Check with your local electrical authority to make sure the proper electrical certificates are up to date and in order.
Although your lawyer can help with this, it would be much better to get the information upfront. You could purchase this home like McLaren and be in a legal battle for not closing due to an error in the verification of this legal separate unit. Remember, always ask your realtor first, and clarify with the city. Shawn Kingsbury Mortgage Suite Inc.
Let’s take a look at the rules for the best rates and your situation. Give us a call today!