How Garden & Laneway Houses Are Changing the Game for Real Estate Investors

Canada is witnessing a new type of affordable housing. It’s not the old-fashioned basement suites, tiny condos, or repurposed shipping boxes.
A Garden house or laneway home is an accessory residential unit (ARU), on an existing property.
It is usually built in the backyards or duplexes of single-family houses or duplexes. Coach houses are 700 square feet in size and can have 1-2 stories. Some come with garages, others without.

Although the municipal bylaws may vary depending on where you live, you can avoid costly and time-consuming zoning problems with a new build on a vacant lot.

Why is this such an important development for real estate investors?

Garden houses and laneway homes are making it easier to manage the high cost of living in suburban areas. This is also helping real estate investors add to the market by creating additional rental income. Without having to change your investment strategy, coach houses can be a great way of increasing your real estate portfolio. Multi-family rentals can provide a great income stream without you having to venture into commercial, industrial, or multi-family investing.

Investors may struggle to create cash flow. Leveraging a coach house could be a catalyst for positive cash flow and greater returns.

What types of renters does a coach house appeal to?

The beauty of having a coach home on your property is that it attracts renters who want the privacy and security of a separate house in a desirable neighborhood. They will be mostly young and married people, as well as older singles who just want to live in a comfortable space with lots of privacy. These tenants take pride in their homes and are often proud of their space. However, the landlord is always just steps away should any repairs be required.

Do you own a property that could be used to build a coach home? These are some important things to remember:

  • To build a coach house on your property, you must file an application with the city
  • A Garden Suit Must Comply with Ontario Building Code Regulations, the Zoning By-law
  • Any residential lot with a minimum 32-foot width can accommodate coach houses
  • A garden house must be located in the rear yard of the property
  • Basements are permitted in the garden houses
  • No Parking spaces are required for the garden suites, however, a minimum of two bicycle spaces is mandatory
  • The lot size will determine the size of your coach house.
  • A coach house typically has one to two stories.