House value with/without suite

[nikks2]

10th January 2008 21:49

Hi
I wondered what the value of having a suite is - is a house then worth more or less? More or less desirable to buyers?

[PIG-WIG]

11th January 2008 11:47

Think houses are more popular with basement suites - family friends can come and stay etc. When you look at buying a new house and the basement is not finished you pay extra to have it completed. Once the basement is furnished and completed that gives you a larger square footage.

Of course a basement suite would not be popular if there was a sitting tennant - or could be if the new owners would like a regular rental income.

[Betalil]

11th January 2008 11:59

That's a good question.

I would say that the value of a suite in a home for sale depends on the buyer, his financial situation, his willingness to be a landlord etc. A person who purchases a home with a suite (potential income) can qualify for a larger mortgage, so in essence could get more house. A bank makes no distinction between a "legal suite" or "in-law suite". A suite, in my opinion, does not increase the dollar value of a home (irregardless of the quality of finish in the suite), although it may make it more saleable by making it more affordable to more buyers. I don't think it would make it more "desirable" exactly, as I think that most people would prefer a home all their own without the hassle of tenants and lack of privacy.

I think a home with a suite is more geared to the entry level buyer, or to those buyers who want the "bling" but can't really afford it on their own, or to those who want granny living with them but separate.

So, to summarize: a house with a suite is not worth more or less than a comparable house without a suite. A house with a suite could be more affordable, but not more desirable than a house without a suite. A house with a suite may sell faster (because more buyers can afford it) than a house without.

Hopefully you can follow my reasoning

Cheers

[LongInt]

11th January 2008 17:46

In years past, before air conditioning was as prevalent, some people had a kitchen in their basement that they used in the summer because it was cooler down there. Of course, some used such an arrangement for family members (in-laws, for example) to live in.

However if you are wanting to rent out the suite, there are some things of which you should be aware. You would need to check on building code requirements for a seperate suite. There are issues, such as fire-stopping, that need to be addressed before you could legally rent it out. So if you're looking to buy a house with a suite to rent out, if it's not up to snuff you'll be ripping into some walls and ceilings to upgrade it. Likewise, if you're thinking of finishing a suite in your own house you'll want to deal with those issues before putting on the board (drywall).

[nikks2]

14th January 2008 16:34

Thanks for the replies. We actually own a house with a suite, but dont rent it out. Before we make any changes we were debating if we should keep it or take the kitchen out - without affecting the value of the house.

[LongInt]

14th January 2008 18:06

Taking the kitchen out and leaving that area unfinished will lower the value, not raise it. If you develop that room for another use, it will depend on prospective buyers whether it's more or less valuable to them.

Perhaps Brill (or any realtor) would have a better sense on what the average is. I suspect that, on the whole, having an extra suite will win out.

[Betalil]

14th January 2008 20:59

I actually agree with LongInt, removing the suite would probably be a detriment to a future re-sale (since the suite is already in place). Even if you don't use the suite as such, you may come to appreciate the cooler kitchen in the summer (save on the energy costs for A/C) and to have a "Big Game" room and easy access to snacks (BEER!) LOL . And a ready made "self-cater" for visiting friends and family.

[Brell]

15th January 2008 06:16

Keep the kitchen.. welll unless you hate it and it is poorly done - then just keep the plumbing and wiring... and refinish the rest.

Houses with suites and or suite potential are increasing in demand for many reasons:

1) affordability - younger buyers are supplementing their mortgage by renting a portion of the house out.
2) Ageing population - increasingly, we are seeing families look for homes with suites to accomodate their parents ( wonder if our kids will do that for us?)
3) Folks from Alberta wanting to get into a place in the Okanagan that they can use for a vacation home and get some income out of when they are not there and have someone on site to "watch the place"
4) The fact that our kids can not get into "starter homes" - if we have a suite - they can be at home - but not in our hair... ( I know... but more and more... they are remaining IN the nest... till thier 30's)

... and yes... then there is the SuperBowl Party!

We are seeing many newly constructed homes built with the infrastructure for a suite in the basement allowing the buyer to finish it if they like.

I think it is an emerging trend - as land prices continue to rise here and density and affordable houseing become more significant - the favour and value of a suite will impact saleabilty.