The numbers on a two unit home
A 20-year projection for a Richcraft Tandem Series home at $863,800.
You live upstairs and rent the basement for $2,000 a month.
Your monthly housing cost
$2,495
Year 1, after the basement rent
Without the suite
$4,455
Same house, no basement rent
Basement covers
44%
of the house's monthly costs
Renting the upstairs instead
$2,700
per month, with no equity
Cash to close
$203,760
Down payment, closing costs, appliances
Equity after 10 years
$442,367
If sold, after selling costs
Home value and mortgage over 20 years
Assumptions
- Purchase price
- $863,800
- Closing costs and appliances
- $31,000
- Down payment
- 20% ($172,760)
- Mortgage
- $691,040 at 4.20%
- Amortization
- 30 years
- Monthly mortgage payment
- $3,364.69
- Upper unit rent
- You live here
- Basement unit rent
- $2,000/month
- Property tax, year 1
- $7,500
- Insurance, year 1
- $2,200
- Maintenance
- 6% of the full rent potential
- Vacancy
- 2% of the basement rent
- Rent and expenses grow
- 2% a year
- Home value grows
- 2% a year
- Selling costs
- 6% of the sale price
Mortgage interest compounds semi-annually, the Canadian standard for fixed-rate mortgages.
Year by year
| Year | Basement rent | Expenses | Mortgage | You pay | Mortgage balance | Home value | Equity |
|---|---|---|---|---|---|---|---|
| 1 | $23,520 | $13,084 | $40,376 | $29,940 | $679,213 | $881,076 | $201,863 |
| 2 | $23,990 | $13,346 | $40,376 | $29,732 | $666,883 | $898,698 | $231,814 |
| 3 | $24,470 | $13,613 | $40,376 | $29,519 | $654,031 | $916,671 | $262,641 |
| 4 | $24,960 | $13,885 | $40,376 | $29,301 | $640,633 | $935,005 | $294,372 |
| 5 | $25,459 | $14,163 | $40,376 | $29,080 | $626,666 | $953,705 | $327,039 |
| 10 | $28,109 | $15,637 | $40,376 | $27,904 | $547,422 | $1,052,967 | $505,545 |
| 15 | $31,034 | $17,264 | $40,376 | $26,606 | $449,873 | $1,162,561 | $712,688 |
| 20 | $34,264 | $19,061 | $40,376 | $25,173 | $329,790 | $1,283,561 | $953,771 |
If you sold after 5, 10 or 20 years
Compared with renting the upstairs for $2,700 a month, rising 2% a year.
After 5 years
- Home value
- $953,705
- Selling costs
- -$57,222
- Mortgage payoff
- -$626,666
- Your equity at sale
- $269,816
- Paid out of pocket
- -$147,572
- Cash to close
- -$203,760
- Rent you didn’t pay
- $168,611
- Ahead of renting by
- $87,096
Annual return, counting rent saved
7.58%
After 10 years
- Home value
- $1,052,967
- Selling costs
- -$63,178
- Mortgage payoff
- -$547,422
- Your equity at sale
- $442,367
- Paid out of pocket
- -$289,491
- Cash to close
- -$203,760
- Rent you didn’t pay
- $354,771
- Ahead of renting by
- $303,887
Annual return, counting rent saved
10.14%
After 20 years
- Home value
- $1,283,561
- Selling costs
- -$77,014
- Mortgage payoff
- -$329,790
- Your equity at sale
- $876,757
- Paid out of pocket
- -$553,957
- Cash to close
- -$203,760
- Rent you didn’t pay
- $787,235
- Ahead of renting by
- $906,275
Annual return, counting rent saved
10.00%
11 Ottawa projects offer two unit homes
From Caivan Communities, eQ Homes, Landric Homes + Group Heafey, Minto Communities, Richcraft Homes.
About these numbers
These are estimates based on Ron's assumptions, not a guarantee or financial advice. Prices, rents, interest rates, taxes and insurance change, and every buyer's situation is different. Rental income is taxable, and these figures are before income tax. Talk to Ron, your mortgage specialist and your accountant before you buy.
Want these numbers for a specific project?
Ron can run the same projection on any two unit home in Ottawa, using your down payment, your rate, and current rents for that area.
Or call Ron at (613) 890-0444