4 Benefits to Converting a Single-Family Home into a Triplex
Introduced in 2022, the “More Homes Built Faster Act” has resulted in an end of exclusionary single-family zoning, meaning the allowance of up to three household units on a single residential property. This means that existing single-family homes can be converted into triplexes without bylaw amendments or municipal permissions. As such, converting a single-family home into a triplex has taken the investor market by storm. However, before starting any new project it is important to confirm proper zoning for your municipality and lot coverage requirements.
In this blog post, we will explore why converting a single-family home into a triplex is a good idea for savvy real estate investors.
Increased Rental Income
By converting a single-family home into a triplex, you can increase your rental income. Instead of renting out the entire house to a single tenant, you can rent out three separate units to three separate tenants. This allows you to attract tenants who are looking for smaller, more affordable living spaces.
Lower Operating Costs
With a triplex, the property owner can benefit from economies of scale. By sharing utilities such as electricity, gas, and water services, the overall operating costs decrease. In addition, yard maintenance services, like snow plowing/shoveling and grass cutting, is constrained to one property, rather than three. Lastly, the maintenance and upkeep of three separate units can be less labor-intensive compared to a larger apartment complex, resulting in fewer additional hiring costs and less time consumed.
Multi-Generational Living Trend
In recent years, there has been a trend towards multi-generational living arrangements. By converting a single-family home into a triplex, you can cater to this trend by designing a floor plan that considers the needs of extended families. One unit can be designed for grandparents, another for parents, and the third for younger individuals or siblings. This living arrangement can appeal to a growing customer segment, providing a competitive edge, and increasing demand for rental properties.
Increased Property Value
Finally, converting a single-family home into a triplex increases property value. By creating separate rental units that each bring in income, the cash flow and return on investment of the property can increase dramatically. Not only will the rent collected from the three units increase overall rental income, but higher market value can also be realized from the property, often increasing the investor's equity and return on investment.
Converting a single-family home into a triplex is an attractive option with many benefits for savvy investors. It can lead to increased rental income, lower operating costs, and cater to key market segments.
The conversion process may be overwhelming at first, but with proper planning and execution, it can be a profitable investment with significant returns. Now that you're aware of the benefits, consider converting your next single-family home property into a triplex for higher financial gains.
If you would like to discuss your next investment property, get in touch with us!