How You Can Generate Rental Income Without Buying Another Property: The Benefits of Garden Suites in Toronto and Hamilton

As Ontario's housing market becomes increasingly competitive, Individuals and families all across the province are looking for innovative living accommodations that are within budget and still in their target geographical area. Toronto and Hamilton have turned to the innovative approach of "Garden Suites" in an attempt to fulfill this demand. These detached, secondary units can be built in your backyard, offering a unique opportunity to generate rental income without the need to purchase an additional property. Not only can these smaller homes offer a budget friendly alternative for the renter, they also create opportunities for eligible home owners to create a new income stream, increase the value of their property, and open up new opportunities for downsizing. Here’s how a garden suite can benefit you financially and why our team at Imperio Construction is the ideal partner to guide you through the process.

What Are Garden Suites?

In Toronto and Hamilton Ontario, a "Garden Suite" is defined as a detached, secondary residential unit located in the backyard of a primary home. Unlike laneway suites, which require access to a public laneway, garden suites can be built on residential properties that do not back onto a laneway. These suites are intended to be modest, self-contained living spaces that provide independent housing while fitting within the existing neighborhood. They can be configured with utilities connected to the existing building, or have the utilities separated.

In Toronto, the maximum allowable size for a garden suite is generally 600 square feet. This figure can vary depending on specific property conditions, such as the size of the lot, but 600 square feet is often cited as the upper limit for garden suites built under the city’s zoning by-laws. The 600 square foot limit does not include basement space, which can be configured to further add to the size and function of the garden suite.

They serve multiple purposes, such as providing additional living space for family members or generating rental income, and they contribute to increasing housing flexibility in Toronto’s urban areas​. We have noticed a trend in homeowners building garden suites to create a flexible downsizing plan, in which they can eventually move from the main dwelling to the garden suite. This allows the client to stay in their preferred neighborhood while still achieving their goal of downsizing and creating an additional investment income stream.

Where Are Garden Suites Permitted?

In 2022, Toronto expanded its zoning by-laws under the Expanding Housing Options in Neighborhoods (EHON) initiative, allowing garden suites to be built across most residential zones. Hamilton has similarly adopted zoning regulations that support the construction of garden suites, recognizing them as a practical solution to increase housing density without significantly altering the character of neighborhoods.

The Financial Benefits of Garden Suites

1. Generate Rental Income: One of the most compelling reasons to build a garden suite on your property is the ability to earn rental income without buying another property. This extra income can help cover your mortgage, pay property taxes, or simply provide additional financial security. In high-demand areas like Toronto and Hamilton, garden suites can yield substantial rental returns. With current home values at an all time high, and significant equity in many homes, now is a great time to use that equity to increase the value of your property and create rental income stream.

2. Flexible Living Arrangements: Garden suites offer a versatile living arrangement. Homeowners can choose to move into the garden suite themselves and rent out the main house for even greater income potential. This option is particularly attractive for retirees looking to downsize while maximizing their rental income. This flexibility can make a great long term plan for individuals and couples who want to stay in their neighborhood without having the financial or time burden of maintaining a large home.

3. Increased Property Value: Adding a garden suite can significantly boost your property’s value. This secondary dwelling increases your home’s overall square footage, making it more appealing to potential buyers, especially those interested in rental income opportunities or flexible accommodations for family members such as elderly parents.

Cost Considerations

Building a garden suite is a strategic investment that offers significant long-term benefits, far outweighing the initial costs. While construction costs typically range between $200,000 and $250,000, including design, permits, and utility connections, many homeowners in Toronto already have substantial equity in their properties, providing a solid foundation for financing. On average, Toronto homeowners have built up significant equity due to the city's rising property values. This makes accessing funds for a garden suite easier and more manageable.

In addition, Imperio Construction simplifies the financing process by working with a network of trusted lenders, helping you secure the best possible funding options tailored to your needs. In return, homeowners can enjoy rental income and a notable boost in property value, making this investment not just feasible, but highly rewarding in the long term.

Why Choose Imperio Construction?

Building a garden suite involves multiple steps, from securing permits to designing and constructing the unit. Our team at Imperio Construction ensures a seamless experience by guiding you through every phase of the project. With extensive experience in the Greater Toronto Area, we handle everything from initial property assessments and design planning to obtaining all necessary permits and completing construction. We guarantee that with our expertise your garden suite will be built to the highest standards, adhering to all local regulations.

Conclusion

We strongly believe that for homeowners in Toronto and Hamilton, garden suites offer an innovative way to unlock the financial potential of their property. Whether you’re looking to generate rental income or create a flexible living arrangement, a garden suite is a smart investment. With Imperio Construction by your side, you can confidently navigate the complexities of this project, ensuring your garden suite is built efficiently and effectively.

If you're considering building a garden suite, Contact Imperio Construction to learn more about how we can help turn your backyard into a profitable and versatile space​ for years to come.