Adding Laneway Suites to Your Toronto Home with Ryan Fernandes and Craig Race

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Podcast Transcription

Georges El Masri [00:00:00] Hello. Hello. This is Georges El Masri, thank you for joining me once again. This is another episode of the Well Off podcast, and today I interviewed Craig Race and Ryan Fernandes from Landscape. So they are architects and they work for a company in Toronto that is helping people develop and create laneway suites that are simple, elegant and basically add a lot of rent to your property, which is the cool thing. So if you’re an investor and you have a property in Toronto and you want to add some additional income, there could be a great resource for you. They’re saying that they’re basically able to add three to $5000 a month of rental income through these suites. So there’s going to be a lot of really good things in here for you if you’re looking for some creative ways to add value to your property. It can also help you with the strategy if your goal is to refinance. So on this episode, we talked about the cost of building a laneway suite, the expected rental income, the concerns if you’re a property owner and some of the challenges that could come with creating these suites and just general property and zoning requirements. So I hope you’ll enjoy the episode. Please be sure to leave us a five star review. Share this with your friends and family! And if you want to learn more about real estate investing, we have some cool reports that you can download by going to, well, often see for its last report. Enjoy the episode! Welcome to The Well Off podcast, where the goal is to motivate, inspire and share success principles. I’m here with Ryan and Craig from landscape. Guys, welcome to the show. Thanks for joining me today. Thanks for having us. All right. Very quickly. I know there’s two of you. Usually it’s just one guest, but I like to ask you a little bit about your childhood. So maybe where you grew up and just something quick that you remember from back in the days?

Ryan Fernandes [00:01:45] Sure. I guess I’ll go first. So my name is Ryan Fernandes, and I was actually born in a small country in the Middle East called Oman. Not a lot of people know that about me, and it’s a beautiful country, lovely people, very warm weather so totally recommended to anyone but my parents lived there for about 20 years, and then they decided to move to Canada when I was just about three years old, just because there were better opportunities for myself and my sisters. And so, yeah, I think that’s a that’s an interesting fact about myself. Cool.

Georges El Masri [00:02:24] That’s awesome. What about you, Craig?

Craig Race [00:02:27] Well, Ryan’s life was far more interesting than mine. I was born near Toronto and spent most of my life around here, but I did get the opportunity to live in the states and travel quite a bit throughout my life. So I’ve always enjoyed kind of seeing different urban patterns and the way people live, and that’s proved to be a pretty useful considering how rapidly Toronto is changing, being able to kind of take those lessons from around the world and use it to either guide policy here in Toronto, or even just be inspired on different ways to invest in unique housing.

Georges El Masri [00:03:01] Yeah. So why don’t we get into that a little bit? Why don’t you guys tell us just really quickly kind of summarize what landscape is and what you guys do?

Craig Race [00:03:12] Sure. So the landscape is sort of a project manager, although we’re also technically an architecture firm, but our goal is to be the key consultant for designing approvals for laneway suites. So we’re the one throat to choke, so to speak, when it comes to dealing with your architecture and engineering that approvals for laneway suites here in Toronto. Cool.

Georges El Masri [00:03:36] So are you guys? It sounds like you only work in Toronto because I know there are other municipalities that are also allowing either garden suites or laneway suites, whatever the terms are.

Craig Race [00:03:47] At the moment, we’re only in Toronto, although Hamilton is making really good progress on their policies, so we’re excited to try to start finding projects in my neck of the woods. Cool. OK, really like there aren’t a lot of laneways in Ontario other than those two jurisdictions, so that’s our focus for now.

Georges El Masri [00:04:06] OK. For those that don’t know, can you describe what a laneway is?

Ryan Fernandes [00:04:12] Yeah, I can take that one. So laneway suites are essentially secondary dwellings that are constructed behind like traditional homes that basically are on a public laneway. So typically there will be a garage back there. And so these laneway suites, obviously, they increase housing flexibility and animate those spaces, and they provide options for people to live close to community amenities. So sometimes these suites can be used for loved ones. Often times they’re rented out to tenants.

Georges El Masri [00:04:47] Mm-Hmm. Yeah, I was I was just talking to my neighbor here recently, and he was saying that in their backyard there was this shed that was housing an ex-convict by the previous owner. So anyway, what’s the history of laneway suites in Toronto? Is it? Is it something that’s existed for a long time or is this a new concept?

Craig Race [00:05:11] Yeah, it has existed in Toronto for basically more than a century. And, you know, ex-convicts were the type of person who almost originated laneway housing in the city because we have a lot of structures just embedded into our neighborhoods, Seiberg that were like horse barns or industrial uses that people started converting into housing as early as the nineteen hundreds or possibly before, obviously, or modern examples tend to be examples of high design like especially before the policy came into place. People with the wherewithal and the resources would buy properties that were landlocked, so to speak mid-block properties and seek one off approvals to build houses on laneways. Or the more recent policy this would pass here in Toronto doesn’t require that kind of expertize anymore, so it’s far more equal in terms of who has access to it and more efficient for approvals and costs. And it’s something now that Torontonians can really tap into. It’s as of right within our zoning bylaws and it’s easy, which is kind of the first time we’ve ever had a housing typology that’s actually simple and straightforward to get approvals for. Mm-Hmm.

Georges El Masri [00:06:32] OK, so what are what are some of the benefits of like, let’s say you are a homeowner in Toronto and you’ve got a lot which allows for this type of housing or, sorry, this type of suite. What would be some of the benefits to you as an owner? And what about as an investor?

Ryan Fernandes [00:06:50] Yeah. So financially, it like laneway suites make total sense. They’re kind of a no brainer for people that already own properties where you can build a laneway suite. These suites are kind of renting out for four top dollar. And I mean, when you look at the construction cost is maybe around three hundred to five hundred thousand dollars for these and you’re kind of getting rents that are satisfying like the one percent or so we’re seeing rents anywhere from three thousand to even upwards of $5000 on these. So for people that own the light already, it’s a no brainer. And what we’re seeing with air service is that they’re kind of cutting up the main house to split that into several units and then with the laneway suite. In addition, you can kind of make the numbers work cool.

Georges El Masri [00:07:39] And what would be that’s pretty awesome that you’re getting three to five grand a month in rent from these from these suites. What would be the procedure like you again, going back to that scenario, you own a property you’re interested in and putting in a garden suite. What do you do? What do people do? They contact you and you guys start applying for permits? Or what does that procedure look like?

Craig Race [00:08:02] Well, first thing to mention, there is soap garden suites are different than laneway suites when we speak. I think you said a garden suite.

Georges El Masri [00:08:10] I may have to right on our Rob Break.

Craig Race [00:08:14] Well, and that’s important to talk about, too, because those are forthcoming here in Toronto. Hopefully, sometime next year, there will be a policy in place for those. But right now you can only do a detached rental unit where you have a laneway about in your backyard. OK. And really, the first step is to email us so you can see what’s possible on your property. There are several companies that offer free assessments to let you know if there are any concerns, like protected trees or emergency access requirements that you need to watch out for. But ultimately, if you contact info and landscape Isaiah with your address, we can let you know roughly how big of a laneway suite you can construct and give you a couple of other high level insights that’ll help you know if it’s worth pursuing

Georges El Masri [00:09:02] what could be some of the challenges of putting in a laneway suite?

Ryan Fernandes [00:09:07] Yeah, so a couple a couple of issues with some of the properties is emergency access. That’s one of them. And then also trees. If there are trees kind of impeding the area where you would be constructing, Toronto protects trees that are certain that are a certain diameter and they’ve got like a bylaw in place. So that’s something that we need to work around if there are trees on the property. And then in terms of emergency access, you need to basically be able to have firefighters get to the square if there is an emergency. And so access can either be can either be through the like a side yard setback from the house or through the lane itself, and there are certain distances that you need to comply with.

Georges El Masri [00:09:56] OK, so speaking of this, emergency access is just to kind of elaborate on that is that based on the width of the laneway itself or are there other factors?

Ryan Fernandes [00:10:08] So you need to have. So the specific requirements are you need to have 0.9 meters between your house and the property line so that so that firefighters can get through to your main house and to the to the laneway suite. And then there are distance requirements, so it has to be 45 meters to the curb, which is basically the length of the fire hose. Yeah. And then you can have like a 40 another 45 meters, if they’re if they were to put like a pumper truck there, for example, and then reach the fire hydrant.

Georges El Masri [00:10:42] OK, and let’s say your property doesn’t need those exact numbers. Are you able to apply for a minor variance to move forward?

Ryan Fernandes [00:10:50] So in Toronto, they have different provisions that you can comply with if you have what’s called like an extended travel distance. And so that that allows you to kind of be eligible even if you have up to 90 meters versus the forty five. And it kind of as a result, those provisions can be either reduced number of windows on the laneway suite or if you put sprinklers in, that’s another way to kind of get around it. Mm hmm.

Georges El Masri [00:11:21] Cool. Interesting. And what are some of the general requirements that you’d be looking for if you are a property owner? Is there like a certain law that says you have to have in order to put a laneway Sweden? Or what would be some of the other requirements?

Ryan Fernandes [00:11:37] Yeah. So the first thing to check, obviously, is that you’re in an area of the city. Pretty much all places of the city allow laneway suites, except for one tiny little area. So you make sure you’re in an area that allows laneway suites. You need to make sure you’re zoning is presidential and you need to make sure that you have at least three and a half meters of frontage on a laneway. Those are kind of the three main things, and then obviously you need to be able to satisfy the emergency access requirements. Mm-Hmm.

Georges El Masri [00:12:09] And going back to that cost, you said it could be three to five hundred thousand. What would make up the that amount? Is it liking the construction? Is that including the construction, the permits, the fee that the person would have to pay you? Or is that being there additional fees as well?

Ryan Fernandes [00:12:29] Yeah, so that is typically the construction costs for the project. Obviously, a lot of the costs are kind of fixed regardless of the size of the laneway suite. So for example, the service saying those are kind of big costs that regardless of the size of the laneway suite kind of remain the same. So those costs that I was referring to is pretty much your construction costs.

Georges El Masri [00:12:56] OK. And then there would be additional fees like consultation fees or whatever to your company and whatever else. There might be permits and whatnot.

Ryan Fernandes [00:13:06] Yeah, exactly.

Georges El Masri [00:13:07] OK. Now is this would this be considered new construction. Like, do you have to get tariff on warranty and that type of thing on the line with suites? Or is that a different, different thing?

Craig Race [00:13:21] It depends on what you want to do with it. If you’re planning on selling it within a year of completing construction, then it does have to be very unwarranted. Just like any new home, OK, but if you’re intending to own it beyond that, then it’s not required.

Georges El Masri [00:13:36] Got it! OK, that’s pretty cool. And how long would it take from start to finish to build a laneway suite?

Craig Race [00:13:43] We normally suggest between a year and a year and a half from the day you call landscapes of the day, you get the keys to your new laneway suite, and the variance in that time is really dependent on if we have to deal with trees or limiting distance agreements with neighbors and other bureaucratic things that can add time to the project. Also, how big it is?

Georges El Masri [00:14:04] Yeah, for sure. And I know this may not be your field, exactly, but do you know if there are any and if there is any sort of financing program to help homeowners with the fees associated? Or is it just up to them to get that all sorted out?

Craig Race [00:14:19] There’s nothing specific that we’re aware of. There are a few brokers that are trying, but it’s hard to laneway suites. But in terms of the financing products, there’s nothing specific to laneway suites. It would be the same product used for any kind of additional unit. Yeah, most of our clients, like if you owned your house or your property for a few years, you probably have enough equity, even just take out if you look at self-finance. But if you’re buying new, you’re going to have to find a that source that is just either private financing or maybe some kind of institution. So. Yeah.

Georges El Masri [00:14:54] Cool. So, OK. So start to finish. We said it’ll take about one to one and a half years. Are they being you guys typically getting these homes built? Or are your clients getting these homes built by a builder of some sort? Or are they usually using prefabricated homes or something similar?

Craig Race [00:15:16] Either. Or the majority of our clients just do stick build on site with traditional construction, but there are several companies who can do like flat panel systems. Mm-Hmm. Really, the viability of that is dependent on how expensive your time is. So if you’re doing this as like an investment property and time is of the essence, saving that one to two months on framing is probably worth it because it will allow you to overturn your projects faster. But if you’re doing this as sort of like a one off project or a time is not of the essence. Just going with traditional set framing usually keeps costs a little bit lower when carrying cost is a factor.

Georges El Masri [00:16:03] Right? Do you know approximately how much cheaper it is to go with traditional construction versus prefab?

Craig Race [00:16:10] It’s pretty minimal, but when you’re carrying costs, it’s essentially nothing, it’s almost a wash. Yeah. Cool.

Georges El Masri [00:16:20] All right. I know we covered quite a bit. Is there anything you guys can think of that would be important for somebody to know if they’re if they’re looking into putting a laneway suite?

Craig Race [00:16:30] Well, the most important thing here in Toronto, there are two things that you really that are really exciting about language speeds compared to other types of units. The first is that when you apply to put a laneway suite onto a property, you’re parking requirements that the whole property goes to zero. So it doesn’t matter if you have a six plex on the front house. As soon as you put the laneway suite on the site, you don’t have to provide any parking, which obviously is great because it helps avoid minor variances and gives you the flexibility to provide parking or not, depending on where you’re at. Simon’s and the other is that laneway suites are exempt from development charges, so you don’t have to pay any parkland, dedication or zone charges on laneway suites. They get deferred indefinitely as long as you don’t try to suburb, which isn’t possible anyway, so they’re actually substantially less expensive to build and pretty much any other type of housing. Yeah.

Georges El Masri [00:17:28] Well, that makes me think if you have, let’s say, like a single family home. On a lot and you put in Illinois sweet, does that automatically change like the zoning or, sorry, the property code to a duplex? Or how is it registered? How would it be registered in that case now?

Craig Race [00:17:49] So they’re considered separate buildings. Your main house will say whatever it is, so it’s a detached house or a semi or whatever. That is what it is. And this zoning requirements are independent from the laneway suite. Yeah. And likewise, when you go to apply for the laneway suite, it just gets reviewed as the building itself. Mm-Hmm. Irrespective of what is made, that’s OK.

Georges El Masri [00:18:13] I think the reason I’m asking that. So let’s just say not that previous example you said, let’s say you had a six plex, but assuming you have a four plex. I know that most lenders will do up to four units as a residential mortgage. If you if you have a four plex and you’re out of laneway suite now, you technically have five units. But do you have any idea if lenders will still look at it as a four plex and still do residential financing and just kind of factor in the income from the laneway suite?

Craig Race [00:18:44] They do not, as far as I know, once you had five units on the site that changes it regardless of whether they’re in the laneway suite or on the main house. Got it. Got it.

Georges El Masri [00:18:54] Cool. All right, that’s awesome. I’m assuming that laneway suites would also potentially work as an Airbnb. Do you guys have any info on that? You know, if there are any rules around doing short term rentals in the laneway suites?

Ryan Fernandes [00:19:08] Yeah. So I mean, to our understanding, it is possible to do Airbnb in the laneway suite. However, the same rules apply as the rest of the city of Toronto. And I mean, I’m not too familiar with those rules, but I do know it has to be your principal residence and you can only rent it out for like a certain number of days consecutively. Mm-Hmm. But the rules aren’t any different for laneway suites. It’s cool.

Georges El Masri [00:19:33] Awesome. OK, well, unless there’s anything else you feel like we should share, there’s lots here for people to digest. So unless you guys have anything else to discuss, we’ll just move on to the next section. Sure. OK, perfect. So the next part is the random five. I’m going to ask you five questions and you just tell me the first thing that comes to mind and I guess we’ll alternate. So we’ll start off with Ryan. And then second question Craig and so on. So number one? Ryan, what’s one of your favorite Comfort Foods?

Ryan Fernandes [00:20:07] Favorite comfort food. Problem of boy pizza.

Craig Race [00:20:13] Yeah, yeah, that’s

Georges El Masri [00:20:14] what I was going to say. I was thinking, not pretty basic wine, but yeah, yeah, everybody likes pizza, that’s for sure. OK, cool. Number two, Craig, what’s your earliest memory?

Craig Race [00:20:25] My earliest memory is from the town I was born in Bradford. It’s very vivid. It’s one of my friends. I don’t remember where the friends are. One of my friends was riding his bike down the sidewalk and the other friends threw a hockey stick at him and it rolled off his handlebars and missed his head by centimeters. And today it was the most amazing thing I’ve ever seen.

Georges El Masri [00:20:48] Cool. That’s awesome that you remember something like that. Number three. Ryan, what’s something you wish you’d figure it out sooner, I think?

Ryan Fernandes [00:21:00] Well, I mean, this is related to investing. But whenever when I learned about the birth strategy for the first time, my mind was pretty blown. So that is definitely something I wish I knew about sooner. Cool.

Georges El Masri [00:21:12] Yeah. And it’s definitely an opportunity if you’re putting in laneway suites, an opportunity to force appreciation in and refinance. So that’s pretty cool. OK? Number five What’s the worst or best job you’ve had?

Craig Race [00:21:26] If you say landscapes, the worst?

Ryan Fernandes [00:21:30] The worst job occupied was probably when I worked Canadian Tire. OK, but I mean, to be honest, I definitely know people that have had worse jobs. Honestly, that wasn’t even that bad.

Georges El Masri [00:21:44] OK, I was going to say Canadian Tire doesn’t sound that bad, but yeah. All right, cool. So that wraps it up. How do people reach you? And it’s pretty obvious, but maybe you could just say once again, what services do you provide?

Ryan Fernandes [00:21:57] Yeah. So people can check us, though, on our website, which is landscape dot k. They can also find us on all the socials. We’re on Instagram, I think most actively, but also Twitter and Facebook. And as Craig had mentioned before, if people are interested in learning, if they can put a linguist on their property in Toronto, they can send us their address and we’ll turn around or report to them within a few hours. And that’s absolutely free. And then you can find us both on our social media as well. I’m mostly active on Instagram. Bryan Fernandez Ninety four. And Craig is also on Instagram at Cricket Act.

Craig Race [00:22:42] It’s cool to use those free property assessments like honestly, we do like we’ve done thousands of them. But know if your listeners have a bunch of listings they’re considering investing in, like send us the address of the listings like we use and abuse them. They’re free and they’re really good tool to help you start to understand where language suites make sense and where they don’t.

Ryan Fernandes [00:23:04] Awesome. We also do sorry. Just one other thing we do also hold webinars every month or so. And those are also free and provide information about when we say it’s cool.

Georges El Masri [00:23:17] All right, guys. Thanks a lot for sharing. I hope that the listeners, somebody out there is going to benefit from this and reach out to you guys and maybe get some laneway suites built and take advantage. So thanks for your time, and I wish you guys all the best.

Craig Race [00:23:32] Thank you. Thanks.

Georges El Masri [00:23:35] As always, thank you for listening. I hope you enjoyed the content. And if you did, I ask you to share this with a friend, with a family member, somebody who might benefit. And it’s always appreciated if you can leave us a review, especially if you’re listening to it on the Apple Podcasts app or if you’re on YouTube, give us a like subscribe comment and your support is always appreciate it. Thank you very much.

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