Most Canadians have a goldmine right under their feet – and it's in their own home. If you thought that it would be nice to own income property, you already do. Your basement
can easily be turned into a valuable, legal and sought-after living quarters. A well-planned basement design has untold potential.
What your parents got wrong
Conventional wisdom, as your parents always reminded you, was to pay off your mortgage as soon as possible. Today, that's hardly the wisest thing to do. Instead, turn your basement into a rental unit. By doing so, it becomes a hedge against a potential retirement savings shortfall. A basement unit can generate income and allow you to stay in your home for years to come – on your terms and with peace of mind. In this case, don't listen to your parents' advice – listen to reason.We are living longer and longer. The cost of moving into a retirement residence, when the time comes, can quickly burn through the proceeds of the sale of your house. This scenario plays out all too often. It doesn't have to come to this. Padding your savings with rental income from your home can greatly ease financial pressure and put you in control of your future.
Rethink your strategy
You may wonder how you can afford to do this. I can tell you that you can't afford not to. A modest investment today, with the help of a line of credit or another type of loan, will reap untold financial rewards and freedom. Moreover, this investment will increase the value of your house by making it more attractive to those who are stretching themselves to get into a costly housing market.Let's look at a simple example. If you borrow $50,000 to $75,000 to build a basement rental unit, the rent that you collect can pay back borrowed money in a mere five years. At an average rental income of $1,200 to $1,800 per month, any excess is gravy. Your untapped basement is an engine for wealth generation that's just sitting there, and you can't afford to ignore it. This is hardly a bold move or speculative thinking – it's a common sense approach that's supported by math.
So, stop wondering about whether or not you'll outlive your money. You have the power to control that outcome. Don't fear longevity – embrace and monetize it.No offence mom and dad, but when you have a basement, you have options.