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Your Home Can Pay for Itself

By Alex Newman

Special to the Star

Thu., March 12, 2020

When Cynthia Lovat Fraser became a single mom, she needed to bump up her income to allow her and her children to keep their family home. So she started taking in language students. It helped offset costs, and since she was already cooking and doing laundry, it wasn’t a stretch to do extra.

When her kids left for university, Lovat Fraser switched over to bed & breakfast guests — at first B&B Canada, then Airbnb. Since the Beaches had no hotels, she almost always had guests, and it was lucrative compared to the language students.

The one question she was often asked by friends was about security. “I never had a problem, and I’d leave my computer out,” she said. “You have to let go of these kinds of worries any time you have someone staying in your home. Otherwise don’t do it.”

Lovat Fraser, who recently sold her home for a condo, is one example of how people make their houses pay. With record low vacancy rates, and skyrocketing rents, many GTA homeowners are in a good position to do the same.

Students: Toronto’s language schools predominantly run their own homestay programs and, generally, the host family receives about $750-800 a month for a room, laundry, Wi-Fi and three meals a day. Not a huge amount of money considering what a single room goes for, but as Lovat Fraser points out, “it’s steady, predictable and the students are vetted for you. And since I had my own children to cook for and do laundry, it’s not a big deal to add extra.”

The upside is the homestay company connected with the language school vets students, collects money, and pays the homeowner.

Isaura and Tony Amaral host two students during the school year, and three in summer. They became accidental homestay hosts several years ago when the International Language Academy of Canada’s former director — a friend of theirs — asked them to host. Since they had a big house, and cooked every day for their own kids, they gave it a shot. That was 15 years ago, and they haven’t stopped

“You’re not making a lot of money on this, but it all helps,” explained Isaura. “We’re creative cooks and know how to make healthy delicious food at a reasonable cost.”

The students become “part of the family while they are here,” she added. “We are still in touch with our first student from Mexico.”

Rent a room: Peruse Kijiji and you’ll find a plethora of ads for rooms to rent, often around $800-850 a month, especially downtown and close to transit.

Things to consider before you try it include whether you need extra home insurance, doing credit checks, completing proper rental forms and your local municipality’s housing bylaws.

When you live in a house that is your principal residence, short-term rentals are allowed for up to 180 nights a year; within that period three bedrooms can be rented for up to 28 days each. Homeowners can also rent their whole house for up to 180 days, or six months, a year.

Short-term rentals must be registered with the local municipality for a fee and also pay a Municipal Accommodation Tax. Airbnb pays a one-time licence application fee of $5,000 plus $1 for each night booked.

Executive rental: If you’ve become a snowbird, this may be the way to go. The rental length usually ranges from one to six months, and the property must be fully furnished.

“It helps to be fully serviced as well, with cable, Internet, bi-weekly cleaning and usually nicer services on site,” added Kory Zayne, who started Property Dots in early 2019. “When everything is taken care of, professionals are able to focus on why they came to the city — professional development, a contract gig, renovating their home.”

Pricing, Zayne said, depends on location. Furnished, one- bedroom condos downtown can fetch $5,000 a month in the summer, $3,000-$4,000 in winter. A two-bedroom condo suite in the city core can earn $5,000-$7,000 in summer, $3,500-$5,000 in winter.

After expenses, the fee is split 80-20. For their 20 per cent Property Dots handles everything from photography, creating the profile and ad, co-ordinating guests and properties, and cleaning. They also take care of damage deposits.

Basement rentals: Renovating the basement in order to rent it out can make financial sense, said contractor Mark Madigan of Total Renovations Inc. Legal basement suites command rents, for example, between $1,500 to $2,000 a month in Toronto’s high-demand Beaches community. Madigan estimated the cost to build a basement apartment at between $75,000 and $150,000.

Making it legal involves adhering to local zoning requirements, as well as the Building Code — which includes electrical and fire regulations — and getting the right building permits. Basement suite ceiling heights must be 1.95 metres; there must be two exits (a second door or window large enough to get out); and natural light requirements must be met.

Insurance: Not all insurance companies will cover your home to include renting it, or leasing rooms. CAA, for example, will not cover either short term rentals such as Airbnb or a four-month executive rental, but will cover renting with a one year lease (whether you are present or not). If you rent a room to someone or share the house, you also need to update your policy and the roommate needs to have their own insurance.

Screening renters: Zayne’s company does all the vetting. For short-term rentals such as Airbnb, he advises reading previous reviews and how a potential client uses the service — “negative and positive reviews can be pretty telling. Airbnb has different levels of verification like phone number, email, government issued i.d.,” he said.

The Ontario Landlords Association has advice about screening potential renters and tenants. Prospective tenants should always complete your application form, and be open to you running a credit and background check. Don’t neglect to contact previous landlords and employers, and do a thorough interview.

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