Although laneway homes have only joined Toronto’s ever-evolving housing profile in the past ten years, their impact is palpable. Over only a short few years, hundreds of new self-contained units have sprouted up, offering a unique alternative to traditional housing.
Despite their common cultural affiliation with Toronto’s dense urban core, laneway homes can be built all across the city (pending regulatory adherence). With that in mind, homeowners in Etobicoke are presented with the same, and in some ways – even better degree of investment opportunity.
If you’re an investor or equity-savvy homeowner in Etobicoke who is considering the construction of a laneway home, this introductory article is for you. Continue reading for further insights.
Eager to invest in Toronto’s high-opportunity market? Our strategic advisory services can ensure you accomplish your present and future real estate goals. Call us at 416-722-4723 or reach us by email at evan@christensengroup.ca.
Building a Laneway Home Vs. Buying a Condo
In terms of dedicated income properties, many investors (particularly in Toronto) opt for a one or two-bedroom condominium. The lower upfront costs of a condo, paired with the high demand for compact living spaces make them an easy, relatively straightforward choice.
Market data shows that a two-bedroom laneway suite and a two-bedroom condo with similar square footage can earn the same monthly rental income. Using condos as a basis for comparison, demonstrating the investment potential of a laneway home is simple.
As of the writing of this article, the hard construction costs for a two-bedroom laneway property range between 350 and 400 dollars per square foot on average. Compare this to a Toronto condo’s average cost of roughly 1,180 dollars per square foot and the margins are certainly compelling. Of course, there are other soft costs and one-off expenses involved in building a laneway home, however, it is usually a smaller upfront investment.
Looking to make a real estate investment in Etobicoke? Explore these related resources for more advice.
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Tenant Management
Owning an income property comes with a number of responsibilities. Compared to investing in a separate home or condo, owning a laneway home can make property management significantly easier. Rather than routinely commuting to another property for maintenance or tenant relations, operating a laneway rental keeps your landlord duties as close by.
Should You Build a Laneway Home in Etobicoke?
Although Etobicoke is part of Toronto proper, the region’s history as an independent city and unique cultural tapestry make it different from the inner city in a number of ways – including real estate. This asks the question, does building a laneway home in Etobicoke offer the same investment potential as Toronto? The short answer to this is yes. However, with closer analysis, it’s evident that Etobioke laneway homes may be even more investor-friendly than Toronto.
As Canada’s largest city, the demand for rental housing in Toronto has long been exceptional. That said, it is a common misconception that the city’s hottest investment pockets are limited to only downtown. In reality, high-quality rental properties are sought-after all over the city, continuously fetching impressive returns in even the most under-looked enclaves.
Therefore, building a laneway home in Etobicoke can offer the same ROI as central Toronto. Further, given their current rarity west of the Humber River, laneway homes stand out as a unique place to live. This charm can create elevated interest from potential tenants, and in turn, higher rental rates.
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Can I Fit a Laneway Home on My Property?
Investment-wise, laneway homes offer a myriad of advantages for homeowners. One of the most compelling of these perks is the fact that you can build them on your existing property.
However, the City of Toronto outlines a number of requirements in terms of legal eligibility for laneway home construction. Unfortunately, not all properties in Etobicoke are large enough (or appropriately laid out) to accommodate these restrictions. Therefore, homeowners must perform their due diligence before proceeding with any serious plans.
If you’re looking to build a laneway home on your property, the lot must be a minimum of 7.5 metres wide. Further, the laneway or alley it sits on must be a minimum of 3 metres wide. Your rear yard must also be large enough to meet depth requirements, which are dependent on the height of your laneway home.
If your laneway home is under 4 metres tall, it must remain a minimum of 5 metres from your primary residence. For properties taller than 4 metres (to a maximum of 6.3 metres), it must be a minimum distance of 7.5 metres from the main home. Keep in mind that you must retain a 1-metre gap between the rear property line and the perimeter of the laneway home.
Should you have adequate space, there are still restrictions on how large of a property you can build. In Etobicoke, laneway homes may have a maximum width of 8 square metres and a maximum depth of 10 metres.
Considering the addition of a laneway suite to your home? Our strategic advisory services can help. Call us at 416-722-4723 or reach us by email at evan@christensengroup.ca.
