Table of Contents
Erwin Szeto [00:00:06] Greetings, my fellow wealth hackers. Welcome to another episode of The Truth About Real Estate Investing Show. My name is Erwin Szeto and I hope you’re all having an amazing week. I know I am. My golf game is improving. Last week I was able to trim 16 and 18 strokes off previous rounds of golf at respective golf courses and tracking results and using consistent rules of play make tracking more effective. And there’s an old saying in business, what gets measured gets done. So whatever you deem important in life, you should be checking on it at a regular like regular intervals. For example, how many times do you spend time with the kids each week? How many date nights you had? Net worth, monthly cash flow, vacation weeks, etc.. All-important metrics to the wealth hacker. Aside from golf, it’s been an awesome, awesome week. One evening after dinner, I took the kids for an evening stroll around the pond behind the house, and we made it. We’ve been making our thing to see what wildlife we could find each night. I was wondering what we find this spring so far with the kids. We found a pair of beavers. Frogs. More recently, baby d’s and ducklings, a turtle. And this week, a nesting, snapping turtle, laying eggs. So cool. I don’t know about you, but this is the first time I’ve ever witnessed a turtle laying eggs less than 200 yards from my house. Nonetheless, anyway, she laid somewhere around 30 eggs just next to her walking past. So to protect the eggs, the next morning, when my mom was gone, the kids and I installed two orange cones next to the nest and no one would step on it. I used to use long golf tees to pin down the coins that don’t just blow away. And now I’ve ordered some reflective driving markers for a longer term solution. After Googling and finding out that baby turtles need 60 days to incubate, I need a longer term solution. I also scolded a lady in front of my kids for getting too close to the nesting mom. She got within two feet so she can get a better look. And then the mom was tucking your head into her shell, which is what they do when they feel threatened. Because this is what I’m doing with my kids to enjoy the outdoors and teaching them about wildlife and just as importantly, respecting living things except for mosquitoes. I’m nobody’s food source. If the turtle sighting wasn’t exciting enough, the highlight of my week has always been that friend of mine inclined to, by texting me, letting me know we could book our second COVID shot. And I did right away. The big day is July 14th, and I couldn’t be more excited about putting this whole coronavirus thing behind me. As someone who enjoys doing research, reading charts, etc., the most recent stat the UK and how the new COVID cases COVID case two hospitalizations rates are dropping even as a fourth wave begins. Thanks to the Delta variant, I can tell you vaccines work. So the Delta variant is the one that ravaged India. So no thank you. For me, my family. Me personally, I’m not going to hide in my home. My kids are going back to school in person this fall, knowing our borders are basically open and knowing how I know personally know people who have avoided or simply paid the fine to skip the quarantine hotel. Variants will continue to come into Canada and into Ontario, so my choice is for chain to protect ourselves. So making this for science will protect us from bad government. But thank you government for the free vaccine anyways. Okay. I almost forgot. I also gave a 30 minute presentation to 60 graded students on investing as part of their financial literacy segment of their math class hosted by my award winning teacher friend Ms.. Horst. She wins awards every year for being a leading edge teacher. For example, she introduced technology into the classroom. She asked the board to buy a whole bunch of Chromebooks and didn’t even prepare school reports. Private Blog Format. The world needs more teachers like Ms.. Horst. Anyways, after getting the okay that I was allowed to be unfiltered about all the money printing going on, stuff not covered in the mainstream media. I think I did all right. I hear some students go as many as six pages of notes and even one student reached out on my website asking if I would be their mentor. As always, it is my honor to give back to the community what I’ve learned. So if you’re an educator out there, grade eight and above, I’d be happy to present to your students as well. Just ask, I think, in order to find me. I know. I wish I knew this stuff earlier. As I shared the students, I believe my net worth would be four or five times higher if I had started this journey at their age. Until this week’s show. We have architects and innovators of laneway housing Ryan Fernandez and Craig Brace from Landscape Dossier. Young Brian reached out on my website to let me know. He’s been a long time listener of the show. More recently, he’s been an investor buying a house and what’s going on with his work at Landscape Design Laneway Homes, which are like Laneway garages, garages repurposed into apartments or brand new build tiny homes on a laneway behind the house. The progressive in government makes laneway housing attractive investments. Hence we have Ryan and Craig here on today’s show to share how the investment works. Ryan and Craig have 50 laneway houses throughout various stages, but they had that much experience under their belt and they’re here to share the hard and soft costs, the brands, tenant profiles and where to find such opportunities. Hopefully the next phase will be garden suites, so we don’t need laneways in order to build these properties and we can have more housing affordability. So for free property reviews and resources go to BW Dot Landscape. Okay. I hope you enjoy the show, gentlemen. Ryan Craig. What’s keeping you guys busy these days?
Ryan Craig [00:05:09] Building houses on laneways, as usual. Ryan Yeah. So just helping with the effort on the on the laneway housing front and I recently started going to a real estate investing as well. Just purchased my first property downstairs. So kind of starting to do that on the side as well.
Erwin Szeto [00:05:29] Yeah. Excellent, excellent. So FII to yourselves and the listener, it’s not often that people will write in and ask to come on the show, but your guys references checked out.
Ryan Craig [00:05:43] I’m sure it’s even less often the people who write in to get on the show actually make it here. So we feel very privileged.
Erwin Szeto [00:05:49] It’s less than one in ten. Is.
Erwin Szeto [00:05:53] Like I like our sheriff, my staff and the previous meeting is like this isn’t never meant to be an advertising platform for folks, but people want it right. But my thing is always if folks have good ways of investing and helping people, then I want to hear about it. Right? So that’s why you guys are here. So let’s start off with the obvious question what is laneway housing?
Ryan Craig [00:06:15] So we’ve had it in Toronto a little bit longer than you all in Hamilton, but not much longer, frankly. It was really an idea that in Canada originated in Vancouver, where if you had a laneway at the rear of your property, you could build essentially a second home to accommodate a secondary suite that came in as a very costly in Vancouver around 2008 and in Toronto in 2018. Although Toronto actually has a very rich history of converting buildings on our laneways into houses, we’ve been doing that for decades here. So it used to be something that was unique and one off and difficult to get approval for. But now it’s a housing technology that’s fully as of right. It’s incentivized so that homeowners and investors are given legs up to go straight to permit without having to go to committee of adjustment costs. So it’s really become a new tool in the toolbox for adding housing to our low rise residential neighborhoods in a sensitive way.
Erwin Szeto [00:07:14] Okay, let’s take a couple steps back. Some folks don’t know what a laneway is. Can you can you explain what a laneway is?
Ryan Craig [00:07:20] Sure. And they’re fairly common in Toronto and also in Hamilton and other municipalities. Essentially, they’re small streets at the back of your property, typically used for accommodating vehicles and graveyard garages. But although that’s what they’re intended for in terms of the spirit of them, they’re actually places where families will congregate and kids will play. So they’re really fascinating pieces of urban infrastructure that, in our opinion, have been historically underutilized.
Erwin Szeto [00:07:50] And who owns that land? The laneway itself.
Ryan Craig [00:07:53] The city of.
Erwin Szeto [00:07:54] Toronto. Okay. So the municipality typically owns it. That’s right. Cool. And now I remember when I was in Vancouver back in May 2018, 2019, and laneway houses were all over the news regularly because they were selling for ridiculous amounts of money. I saw one. I don’t see it sell, but my friend, we were touring and actually saw the property. A laneway house that sold for $800,000 for the listeners benefit you paint the picture of what a Laneway house looks like that would sell for $800,000 in Vancouver.
Ryan Craig [00:08:23] Yeah. So I think one of the one of the differences in Toronto is that the city has been really clear in that they don’t want these laneway houses to actually be covered a lot. The way the bylaws set up is that the Laneway House is actually subordinate to the main house. And so as a result, all the services, the water, the sewer, the gas, hydro, that all comes from the main house. And so they really don’t want these actually be separated, right?
Erwin Szeto [00:08:51] Right.
Ryan Craig [00:08:51] So these laneway suites do have a ton of value to the property itself, but right now they’re not supposed to be sold on their own. And one of the tricky things right now is, since they’re still quite recent, is that there aren’t very many palms on the market of houses that have suites as well that are being sold.
Erwin Szeto [00:09:11] Such as the life of an investor. The duplex thing was no different before the legal delays. Duplexes.
Ryan Craig [00:09:19] Yeah, the good news is we’re getting more calls every day for rental values, so we’re starting to see a pretty broad range of rents for different sized units that we’re using to build our performance around four rides right there, but essentially none that have sold yet. So we’re banking on high values just based on top rate assessments, but we’ll see what happens when people actually start buying them.
Erwin Szeto [00:09:45] So can you paint a picture of like what a laneway house looks like, the ones that you but people are doing now that maybe, maybe before and now and then what the rents are like these like one bedroom bachelors. Three bedroom.
Ryan Craig [00:09:59] Yeah. So I think one of the misconceptions is that laneway houses are tiny. And some people kind of think of them as like these tiny houses. But the truth is, they can actually be really quite large. And what we’re seeing is they can be anywhere from 500 square feet to upwards of 1700 square feet. If you had a basement, which you can, although it adds quite significant costs because of the shoring and the structural requirements, you can get even more square footage, even upwards of 2000 square feet. So these suites are actually quite large. We’re averaging probably 2 to 3 bedrooms, I would say, in each one. Some people do opt for a one bedroom unit because they are keeping a spot for parking.
Erwin Szeto [00:10:48] Got it. And then I’m in the basement. So is it meant to be one whole home? Or is that something you could potentially rent out separately?
Ryan Craig [00:10:58] Yeah. So right now you’re not allowed to split it into two separate units. So you can you can kind of just have one, one building and then the basement can have like an additional bedroom or kind of space for storage. Some people are kind of thinking in the future, maybe this will come around and allow you to split it into a couple of units. So we’ll see.
Erwin Szeto [00:11:19] Right. Right. To the garden suite or I call them backyard suites. I don’t know. I think it would be called garden suites, but I call them backyard suites. So in our early discussions about it, my friends and I were already talking about putting basements in them for the potential for another unit self-contained apartment. And that’s not what things are doing right now yet. So in my community of real estate investors, a lot of us, a lot of us do legal basement apartments. And one of the biggest sticking points is parking lot of bylaws. Zoning is required to have an extra parking spot. So, for example, a house with a basement apartment pretty much everywhere outside of Toronto. Could be.
Erwin Szeto [00:11:57] The two parking spots, sometimes in line, sometimes side by side. And then we don’t know what they going to do. If we want a third unit, do we need a third parking spot on the property? The only parking limitations with laneway housing? Yes.
Ryan Craig [00:12:09] So in Toronto, it’s actually quite different than a lot of the other cities. So in Toronto, if you have a single family house, you need the one side. If you add in a basement apartment, you still need the one side. Then if you had to drive flexi to a complex, you need three. But then if you had a laneway suite, you’re requiring actually goes down to zero because these lots are in in areas that are really well serviced by public transit and they’re super close to amenities. So the city is actually quite progressive in that way. You do need two spots for bicycle parking. So whether that’s on the outside or inside. But if you put a laneway suite, essentially, you don’t you don’t need a parking spot.
Erwin Szeto [00:12:49] Okay. So that’s new to me. I don’t even know what a bicycle parking spot looks. Like or what. Is a bicycle, but it’s two spots for bicycle. Look, lack.
Ryan Craig [00:12:59] Of essentially just a space allocation. Or if you can do a vertical bike parking space that technically has a smaller point and dimension but requires a rack on the wall or a hook on the wall.
Erwin Szeto [00:13:09] That’s simple. What’s the investment for one of these?
Ryan Craig [00:13:12] As small as zero. If you literally have the space on your floor plan large enough to accommodate a bike sitting on the floor, that’s satisfactory. Much like space in your yard where you can park your car.
Erwin Szeto [00:13:25] Well, a bike takes a considerably smaller amount of space than a car.
Ryan Craig [00:13:30] Indeed it does. I mean, you got to start working. And Toronto Council is starting to become fairly ambitious about reducing parking regulations, and we’ve seen that in action. And Ryan’s the linguist. We work so beautifully with that because anywhere there are laneways in Toronto, they’re in a neighborhood the central to the city. So it’s inherently about transit. It’s kind of a perfect symbiosis of where you can build them is where transit already exists. So I think the majority, majority of the properties with laneways are in central Toronto and sewer. What are.
Erwin Szeto [00:14:06] The boundaries? Give me some streets or subway stations that apply for the areas that can find opportunities for housing.
Ryan Craig [00:14:13] The majority are sort of between Hyde Park and the beach neighborhood and as far north as St Clair. Although it’s not that straightforward, there are laneways all over the city and areas within that boundary. We don’t have walkways, but generally speaking there in Toronto proper, there aren’t very many in Scarborough, North York or Tokyo.
Erwin Szeto [00:14:34] Is there an era of those homes and try to help the listener, try to identify, make it easier for them to identify areas where this be possible? Is there a certain time period that laneways or more common, like the 1930s or something, for example.
Ryan Craig [00:14:49] And older? Yes, many of the century neighborhoods of Toronto are where you find the laneways. So neighborhoods that were developed in the late 1800s to the mid-1900s, really it’s honestly there’s not a lot of commonality between them. Neighborhoods other than you, the Gotham or the Dome and laneways are identified on the city’s zoning maps, as well as on websites listed by the Laneway Project and other research bodies like that. Basically, as long as you’re within the city of Toronto and your zoning is residential laneway, there’s a good chance that you can build a suite. I think there’s just one kind of small, tiny enclave in Toronto where for some reason they didn’t want any part of this and then somehow had political clout to kind of get out of it. So there’s this one tiny room where you’re not allowed to develop this.
Erwin Szeto [00:15:42] Style of NIMBYism, which can have a brief history lesson. What was the motivation to create laneways? You know, like most places just have roads.
Ryan Craig [00:15:53] Honestly, it was for vehicles. The laneways became prevalent sort of pre automobile, but especially in the early days of the automobile. And streetscapes were traditionally just front doors and gardens. So garages on the front of houses literally were not a thing. In the early 1900s and it was logical to put stables or garages and the like behind the house on a small utilitarian road. A laneway.
Erwin Szeto [00:16:22] Very good. Very good. And now what is the motivation for homeowners and investors to be investing in Laneway Homes?
Ryan Craig [00:16:29] Well, the aside from the parking requirement, making life very easy is generally just technology that is very light on regulation. It’s pretty easy to comply with the zoning bylaws and go straight to building permit with them as a great design. So for example, we’ve done about 50 projects so far and we’ve only got the Committee of Adjustment three times today. And all of those cases were because we had really weak spots that forced our clients to go to it, not because we wanted extra height or a support area or anything like that. So it’s really just an efficient, cost effective way to get approvals done. And it’s a high quality unit in their basement apartment or any other kind of integral secondary suite. You’re invariably sharing a wall or a floor with someone else. It can lead to construction and just general quality of life issues, sounds and smells. Whereas with a laneway suite, you have a detached second unit that has its effectively its own door on a laneway. It’s literally like you’re creating a second home. Yeah. And one other thing to add is that for homeowners in Toronto, they can build these properties on land that they already own. And laneway suites are exempt from development charges as well. So it’s an it’s a really good investment for people that already own the land.
Erwin Szeto [00:17:53] Notably, the church didn’t mention that. Right.
Ryan Craig [00:17:57] Well, that’s another thing. I mean, council’s been really strong about reducing parking requirements. They’ve also put their money where their mouth is when it comes to incentivizing homeowners to build rental housing. Toronto’s had a toll and sprawl issue for a long time, where we’ve got highrise towers in the core and then large swaths of low rise neighborhoods where the population is shrinking. And that’s just not a sustainable growth pattern. So council and they approve this policy. They incentivize people to build because we need more rental housing that’s family oriented in our low rise neighborhoods.
Erwin Szeto [00:18:31] It’s kind of ridiculous. Whenever I’m driving around on, my wife and I look at a new development in the building, like three stories in a high density area or what will be a very high density area. And that’s ridiculous. Have a housing shortage issue and you’re building only three stories. Yeah.
Ryan Craig [00:18:50] Well, and I mean, I’ve seen a renaissance in Toronto housing in my career, which is not the longer work. But even in recent past, the allowances for secondary suites within homes, the creation of a policy for laneway suites. And now we’re seeing the city really keep running with that. They’re looking at garden suites, other ways to make low rise housing more accessible and affordable. It’s been amazing how we’ve identified this as a problem, and we’re starting to see a real action when it comes to our housing policies.
Erwin Szeto [00:19:22] I know you mentioned no development charges. I think it was right that mentioned earlier that you’re connecting to the existing property, which is I know is a massive cost savings versus having to run new utilities to a property. Could you could you explain the cost of running utilities to a new property and then service property versus be able to connect to a Lamy house, for example?
Ryan Craig [00:19:43] You’re absolutely right. The paying for new services is not cheap. It adds tens of thousands of dollars to those costs. Whereas if you’re just creating a secondary meter or even just branching off from beyond what we currently have, it is a cost, but it’s a costs that you can deal with directly with the contractor. So it’s. Money. But it’s also just easier because you don’t have to worry that you would still be friends and connections connecting to that. So we’re doing well and really the systems are in place to already do that. We’ve been doing that with basement apartments and other kinds of integral secondary units 37 meters for decades. Now it’s just a matter of running a small trench to the back where we can plug it into the laneway suite. And if your basement’s unfinished, that’s. That’s even better, obviously, because you’re doing less damage to the existing house.
Erwin Szeto [00:20:32] Got it. So do this before you finish the basement.
Ryan Craig [00:20:36] Yeah, definitely worth planning if you are doing renovations to the main house. Keeping in mind, if you want to add a language suite or garden suite in the future.
Erwin Szeto [00:20:46] Then I think it’s good advice for the listener. Like you said, the plan. Whenever I look at a property, I’m always thinking of the highest and best use. What is the most I can do from this and then plan from that? So if I am going to put an online warehouse, I’m going to do all that. What I need to do before I ruffins for utilities, before I would finish the basement, for example. Mm hmm. And that’s the point of the show, is to hopefully save folks from these kind of rookie mistakes, right? Yeah.
Ryan Craig [00:21:09] One other interesting, interesting fact. If you are doing work at the existing house, one of the requirements for Laneway Suites is that they’re smaller in the area than the main house. So it’s actually quite, quite funny that if you wanted to increase the size of the laneway suite, potentially you could you could add area to the main house.
Erwin Szeto [00:21:28] Cool. As long as you.
Ryan Craig [00:21:29] Still fit within all the other requirements of the laneway, that is.
Erwin Szeto [00:21:33] So it becomes kind of conditions for an additional splash laneway suite.
Ryan Craig [00:21:38] Well, it wouldn’t be connected, but generally the policy just says that it needs to be smaller. Yeah.
Erwin Szeto [00:21:43] Interesting. Interesting. Imagine that we need to go back on something because you mentioned. Let’s actually narrow that a bit. What are investors doing specifically? Because homeowners have different plans or sometimes they just want a place for their mom or something like that. So maybe they do a bachelor, a one bedroom investors. They’re probably going to be pushing for density two or three bedroom. Right. Is that what you’re seeing? And then my question would be, as an investor, what would that cost to create also, whether they’re renting it for.
Ryan Craig [00:22:11] Yeah, definitely. So the use case really plays a big role in what kind of laneway suite you want to build. So for families that are kind of housing other family members, they might want to create a laneway suite where there’s a nice connection to the main house. They’d also probably not be trying to squeeze in like all kinds of bedrooms here and there versus some of our investor. Clients are trying to fit in a few, few bedrooms here, too, to maximize their returns. And we’re also seeing that ideally they’re kind of aiming for 2 to 3 bedrooms and usually without a basement, just because the basement adds quite, quite a bit of cost. So if you are going for the basement, then you should have like a really good reason for that.
Erwin Szeto [00:22:56] Well, hopefully you can suite it if you can’t see it. I’m not doing. It.
Ryan Craig [00:23:03] Well, it’s an interesting debate. I mean, we build these for ourselves and our model is for the second unit and the main house and build laneway. So because you can do both of those things without going to Committee of Justin and without paying both charges. So you can go from 1 to 3 fully as a break in under a year if you have your ducks in a row or so.
Erwin Szeto [00:23:24] Okay, under a year, meaning between like term it application to being like done build or.
Ryan Craig [00:23:30] From when you close on the properties to when you have a lot.
Erwin Szeto [00:23:33] At stake that’s much cleaner than yeah. These triplex conversions I know people do they buy; they buy like a two and a half storey three storey Victorian semi usually the term of into triplexes. I think that takes like at least two years.
Ryan Craig [00:23:50] It’s all about avoiding committee investment. I mean the bylaws are in place to create these kinds of sensitive secondary units. So if you have the right property, you can go from 1 to 3 fully within the bylaws, as you should, because that’s a responsible way to add density in a way that won’t affect the neighborhood. So that’s kind of a really easy density model. But we’re seeing people go out and I was mentioning basements. I mean, we put basements in our investment properties. Our theory is that maybe you’re only getting an extra bedroom and a ten or something out of its day. But that extra square footage at today’s cost is going to look like the best investment you ever made 20 or 30 years back there.
Erwin Szeto [00:24:31] Condos are selling for as high as like 1800 square foot. So what’s your cost?
Ryan Craig [00:24:37] You know, I mean, at the end of the day, it’s extra space. And, you know, if you’re betting on long term ownership, having that space is just going to be more revenue in the future. Right.
Erwin Szeto [00:24:47] Okay. So how much how much for say, I want a three bedroom laneway house with a basement. What’s that going to cost me?
Ryan Craig [00:24:55] So the general rule for non-basement projects is you’re going to be in the 300 to $500000 range. That’s an all-in. Including your construction costs and staff costs when you add a basement. That’s about an extra $200,000 in costs. So you only want to add a basement on a larger project where you’re getting a lot of space out of them. And also, the barrier to entry is relatively high. So if you already own a property where you can squeeze a one bedroom, then go for it. But I wouldn’t target those purchases. If you’re buying a property oversubscribed, if you want to get at least a two bedroom suite, it’s not a three or four or five. Wow.
Erwin Szeto [00:25:34] Do you have a typical summer bedrooms?
Ryan Craig [00:25:36] Most of our projects are 2 to 3 bedrooms. That’s fairly easy to do. Family, even without a basement, as long as you buy the right property.
Erwin Szeto [00:25:44] Okay. So the 3 to $500000 budget for the Laneway House, plus 200, roughly. I’m going to hold you, you know. I know. Absolutely. Things are never set for before. And then I’m sure the listeners wondering, like they always want to know. Like, I know you probably have a slight cost per square foot. Yeah, I try to.
Ryan Craig [00:26:05] Ask for.
Erwin Szeto [00:26:06] Sports. No, my first question would be like, what is the square footage for a 300 to $500000 laneway house?
Ryan Craig [00:26:13] So that range would accommodate like a 600 to a 1700 square foot area.
Erwin Szeto [00:26:19] Yeah, I’d want then the higher end if I’m going to spend 500 grand.
Ryan Craig [00:26:24] That’s absolutely right. And your revenue up six, you get a marginal difference when you get that second bedroom and that third bedroom. So it’s nice if you can get that extra space.
Erwin Szeto [00:26:35] So what are you seeing them? So 600, I think is considered a one bedroom, but the typical one. Wow. That’s somewhere around one bedroom.
Ryan Craig [00:26:44] Sure, sure.
Erwin Szeto [00:26:45] Well, the ranges and rents that you’re seeing.
Ryan Craig [00:26:47] So I was actually looking at our numbers from the data that we do have. Obviously, there aren’t a ton of these on the market, but we do have a small pool of these. And I was looking at some of these properties. The average size is a two bedroom. The square footage wise, it’s just over a thousand square feet. And based on that, the average rent that we’re seeing is close to 30 $500 per unit. So bad.
Ryan Craig [00:27:16] Yeah. So they ranged from anywhere from 2000 a month to we have one that’s going for 5500 a month. Yeah. The bigger ones, you’re really starting to compete with house rentals. It’s amazing.
Erwin Szeto [00:27:30] How big is the hosts? Four or 5000. Sorry. You said 5000, right? Yeah.
Ryan Craig [00:27:34] So that that one is correct. That was the Jones project. So I think that’s a three bedroom. Right. And that’s 1600 square feet.
Erwin Szeto [00:27:42] 5000 and rent. Can you give the intersection in total?
Ryan Craig [00:27:46] That was the Leslie ville and said Jones, north of Gerrard Street.
Erwin Szeto [00:27:50] Very nice. There we see these numbers. It in north of 1% rule, especially if you already own the land.
Ryan Craig [00:27:57] Exactly. If you already own it, it’s no brainer if you’re looking to purchase to do this. There are a lot more pitfalls. It becomes more difficult. It’s navigable. But ultimately, that’s how the policy was designed, is to benefit people who already own houses. So if you’re looking to purchase for it, you have to be certain. One other thing we’ve been seeing since this has become heights in Toronto is there’s a fair amount of misinformation or misleading suggestions that a property is developable for a language, even if it’s not. So it’s really a case of buyer beware. And fortunately, there are a lot of free resources available that I would certainly recommend to investors to take advantage of. Our company offers free property reviews that we turn around in just a couple of hours. And again, they’re free. So just as many addresses as you want. Part of our reason for doing this is that we want to protect buyers to make sure they’re getting good, qualified information. So using resources like our company and others is really important to make sure you avoid those beginner mistakes. What’s the website landscape dossier?
Erwin Szeto [00:29:04] I’m hoping that listing agents would ask for the same advice and before they advertise it as something else.
Ryan Craig [00:29:10] Yeah, exactly. That’s my thing. And I’ve ever heard in my first career. It’s subtle, but it’s true. There are some things that say developer both really mislead and they’re categorically not. So you really have to be careful.
Erwin Szeto [00:29:23] Earliest can probably sue for that. I’d rather have a definitive answer to have to go back and last through. Somebody exactly as they’re suing is a whole other headache that nobody wants. Renovations are not.
Ryan Craig [00:29:37] Trouble. How we make our money. We’re not. Words. We’re builders. That’s awesome.
Erwin Szeto [00:29:42] Does a friend of mine send me a listing friend of mine and warned him I don’t know nothing about this area. It’s Toronto site, so I know nothing about this. And it was advertised that it was already a duplex. I think it was a three storey two in our story home already a duplex. Not sure the legal status centri home and that is advertising ability to puts a. In the rear yard. Right. And you? And I told them, you know, I know nothing about this market, but I said, perfect world. I can buy a duplex, a triplex and put it in that laneway suite, but I have no idea. Well.
Ryan Craig [00:30:17] Now you can call Ryan and Craig and just go.
Erwin Szeto [00:30:20] O’Malley. No, that’s the whole point of this show is to know stuff. Knowledge is power. All the listing agents are listening. Like if you have a legit property, why not find out if it’s proper before you advertise it? It’s something else.
Ryan Craig [00:30:33] Yeah. And I mean, a lot of a lot of agents are sending potential properties to us to get a sense of if they can actually build a living on that. So kudos to those ones.
Erwin Szeto [00:30:42] Well, again, ideally with selling Egypt, I’ve already done it. It’s like a canister certificate. We always get them first because we know everyone’s going to ask for it. So why not just lay out your cards? The more transparent then the better the transaction. That’s never not the case unless you have something to hide. So I understand. That. This is fascinating stuff. Oh, and then before we were recording, we were talking about what is the difference between a backyard or slash garden suite from a laneway home? Is it different in the handling of the city not as open to garden suites versus a laneway suite?
Ryan Craig [00:31:18] Well, the real answer is that we don’t know yet. The city is undergoing a public outreach plan to gain stakeholder buy in and crowdsource ideas on how the policy should work, which has been pretty exciting to go through. Their goal from the city you hearing is to have a policy in place by the end of this year and at that point we’ll know what the requirements are. If I were to guess, I would imagine it will be similar to the policy in terms of it’ll be in as of right approval, hopefully different from development targets and easier to understand, but we’ll find out. Emergency access and construction access is going to be a critical issue because of garden suite. To answer your question, that’s on a backyard that doesn’t have a laneway. So there’s no access to that regard except through the side yard of the home, whereas a laneway suite, you have to have a lane maybe. So it kind of has the ability to be accessed from the rear. So garden suites are likely to be smaller in size and still apply to different areas of the city, more likely the periphery rather than the corner. So from that, it’s a detached secondary unit and we’re hoping the policy is going to be as easy to access and homeowner friendly as the laneway calls them.
Erwin Szeto [00:32:30] Now, your business does. You have a contracting arm of your business as well.
Ryan Craig [00:32:34] We work with contractors primarily. We build our own stuff as well.
Erwin Szeto [00:32:38] And you guys are building from scratch as in like not modular?
Ryan Craig [00:32:42] That’s correct. So we’ve looked at doing some kind of prefabrication systems before, and there are some that are getting really close to being cost effective. So it’s something we want to do. There are a lot of spatial restrictions when it comes to building in the right way. So the size of panel, we think that the right way is often fairly restricted to a point where you’re not saving a lot of time in exchange for equal or higher costs. But there are some companies that are really starting to look at that seriously, and it won’t be long before we’re seeing that as construction site blow up.
Erwin Szeto [00:33:16] What’s going to be big? Like, for example, my friend ordered a prefabricated pool. That’s all. Carbon fiber, I think. And how you deliver it, there’s a crane to crane it over your home. And if the house. Why would that be different with the prefabricated home before your pad? Hopefully just poor pad. Well, actually, you and I apply your dig first dig a basement. Because. I guess my prefab home doesn’t give me everything I want I can make accessible going to the backyard and stuff. You know, for listeners benefit for anything major like digging a pool. Usually the take a fence down and I imagine without the laneway same problem you probably take a fence down in order to be able to access the backyard to build something.
Ryan Craig [00:33:56] It’s possible to prefabricated an entire season and drop it in with a crane. But because most of the laneways in Toronto are in these century neighborhoods with big trees and overhead wires and three storey homes, it really becomes constricting. So it’s definitely a side by side analysis and it depends on your context to do it.
Erwin Szeto [00:34:21] This is exciting stuff. That’s what’s funny. So is it the laneways, the lane we’ve got to prove first because it’s easier to access versus a garden suite.
Ryan Craig [00:34:29] Essentially. Yeah. The Laneway policies are a little better established in North America. There are other cities that have Garden City policies as close as Ottawa, so that’s kind of the next thing that would be happening here. But I mean, you’re basically right. Laneways. We’re in downtown neighborhoods where people are already used to secondary Swedes, so they were a logical first step that will lead to many more.
Erwin Szeto [00:34:53] That are just naturally there. Makes sense as well because people already had detached garages off a laneway you like. That’s a new space. I need to stick my mother in law somewhere. Put in an electrical space heater cover all. This is pretty cool stuff. And so I know you’re here talking about landscapes today, but you guys do other stuff too. Not just laneway houses, right? You’ll do basement.
Ryan Craig [00:35:17] Well, our company does not. Landscape is purely focused on warehousing. Ryan and I are both passionate about infill housing of all types and investing in homes. So we do basement apartments and whatnot for our own projects, although not always for clients. Maybe Ryan wants to give them a little bit of fun. I would take those off. Yeah. So. Well, I mean, I’ve recently started and were wanting to I’ve started investing probably just over a year ago, so I’ve started kind of educating myself and going all the meet ups and reading the books and things like that there, podcast included. It’s just been a great help guide you. And so I recently purchased the property last year which I basically converted the basement into a second suite. And right now I’m going to take that out and eventually I’ll be moving into their into one of the units.
Erwin Szeto [00:36:10] First property.
Ryan Craig [00:36:11] Continuing to rent at the moment. So it’s in it’s an October go in long branch. So it was one of those older brick bungalows from the fifties located on a street where a lot of those are kind of getting torn down and rebuilt with the two stories or the lots are being split into some use. But we chose to convert the basement instead for now.
Erwin Szeto [00:36:36] Okay, so hang on. My friend of mine just bought a property in Mimiko area. So what you’re talking about has back neighbor is, you know, some ginormous three storey thing that was rebuilt that year, you know, 5150. Like you bought a bungalow. It’s dated is really dated, but he paid like 1.15 for it. Brian, the apologies but you look pretty young. Is that is that the kind of stuff that you’re buying?
Ryan Craig [00:37:00] Yeah. So I mean. It’s kind of a combination of things to start with. I’ve kind of always lived for we have always saved up money on the side. My parents are immigrants, so they’ve kind of always taught me to live within my means and that’s kind of rubbed off on me basically. So I’ve been saving for a while. I purchased this property with my fiancee and so we purchased it together and basically we saved up for a down payment that way. And we purchased this property. And now with the rents, we’re, we’re kind of seeing that property cash flowing each month and that’s helping out depression numbers.
Erwin Szeto [00:37:43] How long were you saving for? Yeah.
Ryan Craig [00:37:47] That’s an interesting question. So, I mean, I’ve probably been saving since I was in elementary school or high school in terms of so I went to school at Ryerson, studied architecture there, and I did my undergrad and my master’s there. And I mean, I was lucky enough to basically have a scholarship that covered my education. And in fact, in my during my master’s, it was actually paying me each month, basically at school and on the side. I was also working a few different part time jobs as well. So I’ve been saving for quite a while. And then we basically put our money together. We bought this property kind of at the beginning of the COVID pandemic. So we bought it for 855. It was actually listed for hire and us kind of negotiated down. And I mean, in hindsight, we got a really good price for that because now already we we’ve seen that prices have appreciated like crazy just over the last year.
Erwin Szeto [00:38:55] With today’s price.
Ryan Craig [00:38:56] B So, I mean, at least based on the fliers that we’re getting from, from all the realtors in our area, that’s at least around 1.1.
Erwin Szeto [00:39:06] Oh yeah. So that makes that’s my friend. 1.13 I think 1.15. He paid for it. Is it completely, basically completely. You know, like I don’t think the previous owner did anything. Well, he’s probably not for 30 years. So it’s like, you know, ornate, really busy looking and tile and stuff like that. Yeah. Oh, so you probably saved. Yeah. You posted 1.5 at least or more. You saved a bit of money by taking action at an opportunistic time. Yeah. Good for you.
Ryan Craig [00:39:35] It was funny. We were actually looking to we were either going to buy a Hamilton and then that would have been a strictly investment property or we were going to buy in Toronto because I mean, a lot of the architecture firms where I will be working and my fiance’s job as well as in Toronto. So we wanted a place that’s close to work and so we thought we might as well buy something that’s close to work, rent out half the building and have that. He paid the mortgage.
Erwin Szeto [00:40:04] So what are the rents? Sorry. What? What did you do? Renovate and how much?
Ryan Craig [00:40:08] Yeah. So we. We converted the basement. We did a few renovations to the upstairs, but the previous owner had taken pretty good care of it, so we didn’t need to do too much on the upstairs. We also said quite a bit of money because I mean, I was able to do the drawings. And we also did a lot of a lot of the work itself in the renovation, which was I mean, it was a great learning experience. I’m not sure if I’m going to be doing that going forward, but we are quite a bit. So we were under 50 change for the for the renovate was when I mean if we kind of had someone do all the work, we’d probably be closer to double that. And so now we’re renting those out as two separate units and the basement we’re actually renting to a family friend. So the rents aren’t as high as they could be, but we’re getting 1500 for the basement and for the upstairs we’re getting 2300.
Erwin Szeto [00:41:03] Are they both friends
Ryan Craig [00:41:07] No, not the upstairs.
Erwin Szeto [00:41:11] Yeah, we had a basement rent recently for 1600 and Hamilton.
Ryan Craig [00:41:16] Yeah, we. We could have. Definitely got cut in more for the for the basement, but we figured we’re just going to have that person there for maybe a year and year and a half. And it would be nice to have someone who’s there to kind of look at the look at the property and kind of take care of it for us.
Erwin Szeto [00:41:35] You can see the attractiveness of Hamilton we were renting out upstairs for 2000 now. So we have a delta of $200 a month between properties.
Ryan Craig [00:41:43] Yeah, I know for sure. Like when I when I kind of, I know purchasing my next property, it’s definitely going to be in one of the smaller towns. I know Hamilton also is starting to get super pricey as well.
Erwin Szeto [00:41:55] Thereby hopefully we get better. We have is in the garden suites soon.
Ryan Craig [00:41:59] Yeah. Exactly. Yeah.
Erwin Szeto [00:42:02] I think we still get our houses for about 40% discount from Toronto though. That’s still something that’s fantastic. And then may ask how much of a down payment you made you just put down 5%.
Ryan Craig [00:42:14] The other so the other part that I haven’t gone into is that we had help in terms of financing, so we put down 15%. But we ended up financing it through a holding company. It was actually through my fiance’s mom’s holding company. So we were able to get favorable rates and like an amortization. So that’s really the reason that it works. If we were to go through one of the big five banks, then obviously the numbers don’t really make as much sense as they do right now.
Erwin Szeto [00:42:45] Right. So your fiance’s mom’s company got into the mortgage.
Ryan Craig [00:42:51] Exactly. So she. Yeah, that’s right.
Erwin Szeto [00:42:54] Awesome. It’s a big story these days about how parents have to help kids and even like some of the headlines, how it’s framed, it’s almost as if you can’t afford a house. Do they blame your parents versus so your parents can’t afford to help you? You need to help yourself is really what the headline should be, right? Or either educate your parents and how they give help.
Ryan Craig [00:43:16] You know.
Erwin Szeto [00:43:19] For example, I signed a great aid today. Right? They’re great. It’s they can’t do much themselves, but they should at least, you know, make a couple of book recommendations to their parents, you know? Hey, did you know what? Sending me university is going to be, like, 70 grand help. You have plans beyond an RFP? Because I’m I want to become a doctor, so it’s going to be a lot more than that, something like that, you know. But, you know, I mean.
Ryan Craig [00:43:43] The thing like a huge part of it is just having the right mindset. And a lot of our parents were immigrants that came here and worked super hard and saved up and that kind of thing. Yeah. Go into to one of the professions and kind of stay safe. But really when you, when you have that mindset shift, then you can really do some great things.
Erwin Szeto [00:44:04] Awesome, awesome, amazing. That’s just fascinating stuff. Three pages of notes. Anything else you guys want to talk about?
Ryan Craig [00:44:11] If you’re listening from Toronto, make sure you follow us on social media so you can help us advocate for Barton’s policy. Like that’s something we’re trying to stay active in because, you know, it was public involvement in the creation of the library policy to do it being so friendly to homeowners and investors. And if we put our fingerprints on the Garden City policy, this is something else that we can capitalize on. But B will create new rental housing that’s really going to affect families in our city in a very positive way. So we’re pretty excited about it. The people we have helping us with it the better.
Erwin Szeto [00:44:45] Yeah. Do you guys go on Instagram or anything is the for example, I’m sure some listeners would like to see some images like pictures of what you guys are up to now.
Ryan Craig [00:44:51] We have lots of portfolio work on our website and social media. If you go to landscape dot com, we have links to all of our social media.
Erwin Szeto [00:45:00] Aspect and then. I’m Torn was so progressive, like I’m not a Charleston progressive forever. I mean, I mentioned earlier parking restrictions that we have in Hamilton and Catharines and Branford every year. And as you know, I used to live in Burlington. Lots of restrictions, tons of restrictions on anything and a whole moratorium on any sort of new build. Right now, the easiest to deal with either. Why is Toronto’s so progressive.
Ryan Craig [00:45:24] When you pay 40% more or you get 40%.
Ryan Craig [00:45:27] More.
Erwin Szeto [00:45:29] You pay double transfer taxes and.
Ryan Craig [00:45:31] You get more poles.
Ryan Craig [00:45:35] We’re facing the hit of housing prices more than anyone else.
Erwin Szeto [00:45:40] So the pain is the greatest. But you said the pain is the greatest for Torontonians.
Ryan Craig [00:45:43] I mean, yeah, obviously we’re all feeling pain with the rising cost of housing, but it’s more pronounced in Toronto. So there are a lot of people who are affected by it, and that’s led to political action and outspoken citizens. And the other thing is, I mean, we’re seeing 100,000 people coming into the GTA each year and we need all these people. So I mean, laneway housing in part includes although it’s not adding a ton of density, it’s one of the tools in the toolkit that will kind of intensify these areas that aren’t really changing much gently without kind of interfering with the neighborhood character that much.
Erwin Szeto [00:46:23] So what can what can listeners do? Like, what can listeners do to help their city where they invest, help our city along in becoming more progressive? Because what I see is the NIMBY voice is much louder than everyone else. Right. They don’t want these things. They don’t want things to get busier. You know, I get it. But like you said, like the pain. The pain is so great in Toronto. Its housing prices are crazy. Condos rent for 3000. Not everyone wants to live in a high rise. You know, I live in a house. I can’t imagine having to ride an elevator all the time, especially poor kids or folks with a pet, you know, to ride the elevator all the time. What can folks do to move things along in their city?
Ryan Craig [00:47:07] I mean, what we did was we established myself and two other people, established a company and spent four years their heads against the wall in city hall. And so something happened. And honestly, that’s kind of what it takes. The good news is that there’s provincial policy that requires every municipality to have a policy for homeowners to build detached secondary streets. So it’s literally a requirement that every city has to do it. Many of them simply are just not acting on it. So with a little bit of advocacy and using Toronto and Ottawa and Hamilton’s secondary policies as a template, it should be possible to see some action from local politicians. But at the end of the day, this is something by the people of Toronto, and you just need to have a confluence of people who care. And I think each person’s voice really matters, like right into the city. Like that’s something that we encourage people to do. And we were trying to get this past city just writing letters of support that helps and goes a long way. Damn, the NIMBY voices were loud here when we started and we made the supporters voices louder. Then when that happens and politicians see the votes will go their way. If they start to support progressive housing policy.
Erwin Szeto [00:48:27] Things change because there’s no way that the NIMBY voice should be louder than the renters voice. But NIMBY. I’m going to stereotype. I’m going to assume that the NIMBYs are generally quite wealthy, especially in relation to the tenants. Why should the NIMBYs?
Ryan Craig [00:48:45] Wouldn’t homeowners care more?
Ryan Craig [00:48:47] They have more to lose. They’re in it for the long run. So they have much different motivations. And unfortunately there is no voice for unbuilt secondary units. So it just takes people with progressive ideas to come up with the right advocacy strategy.
Erwin Szeto [00:49:02] Well, the idea is not that hard to come across. I’m pretty sure housing affordability is probably topic number one for the next election. I think that next election will be probably after the pandemic is over. So number one, probably housing like there’s all these people like Craig Wright and you guys, I know a lot of people who want to be doing these things. They just need to be allowed to do them and they want to do it like on the up.
Ryan Craig [00:49:24] And up is an interesting point. It’s not only affordable housing, too, it’s attainable housing. I mean, it’s not we need affordable housing that benefits all spectrums of income in our province. But also, I mean, to your point where people who don’t have rich parents, how do they get into the market? In my case and in Ryan’s case, it’s because we spent a lot of years at school learning how to design houses so we could use that to our benefit. But for the average Torontonians, they need good housing policies that allow them to put their houses to work for them so that they can afford the increasing prices.
Erwin Szeto [00:50:02] So I’m going to say something that would upset you.
Ryan Craig [00:50:06] Because that’s not that bad.
Erwin Szeto [00:50:08] There’s going to be a lot of people who say, I can’t afford Toronto or Craig come work. Craig and Ryan come work my property in. I don’t know, Barrie, Oshawa, Mississauga, I don’t know. I mean.
Ryan Craig [00:50:21] Depends on the project. I mean, we work on multi-unit houses all over Ontario. The majority are in Toronto, though, and that’s where we specialize. We’ll look at anything, though. Unfortunately, we don’t do laneway houses in Hamilton yet, so there’s going to be a rising industry of design professionals that can help out there will start to happen.
Erwin Szeto [00:50:40] Like you said earlier, it makes complete sense, especially if you already own it. You know, I joke with people like we only have like three months of the year. We can use the backyard for that, make more utilization of it. So we’re making a home, especially if you want your mother in law, that was type thing. And then I want you guys on the show because I view laneway houses and garden suites and as like possibly the final frontier for real estate investing because I don’t know what else we do beyond that. Maybe we do top ups. I don’t know. You guys do those as well. And second or third stories, the houses.
Ryan Craig [00:51:14] Yes, not the landscape, but through our other architecture company. We do. Yes. And that’s another thing that’s growing in Toronto. We forgive our Toronto centric focus today, but that’s just what we know the most and where the most action is. The city is looking at expanding housing options in our neighborhoods in a way that will allow for higher density buildings on our main streets and along transit corridors that are secondary to the major avenues. So certainly in Toronto in the next two years, they’re going to start to see a lot and you will see little housing type houses come up that will hopefully see the tides crash on the shores of the adjacent municipalities.
Erwin Szeto [00:51:55] But I look forward to it for the listeners benefit can you compare a project where you’re at, where you’re doing a top up so adding a second or third story compared to a Laneway house? How does one pick and choose? I’m sure just massive financial distractions.
Ryan Craig [00:52:09] I mean, that one is not exclusive, but the other. A lot of our investor clients will only buy online weekends anymore so they can do a top up and like my.
Erwin Szeto [00:52:17] See.
Ryan Craig [00:52:18] And really, you know, the thing with top outs and main houses is that they’re very contentious for what comes to their approvals. They’re pretty much always going to committee of investment, and it’s a lot more case by case and a lot more dependent on existing structure if you can keep it or if you have to rebuild. So you have to be fairly knowledgeable or have knowledgeable professionals to undertake that very kind of efficiency. Whereas a laneway suite or basement apartments and other integrity units don’t require changes to the main house. Those are a lot more user friendly and policy friendly. So those are big differences. It cost more money and it takes a lot more time to change the name.
Erwin Szeto [00:53:01] I don’t think any investor wants to hear.
Ryan Craig [00:53:02] That.
Erwin Szeto [00:53:04] Path of least resistance, please.
Ryan Craig [00:53:07] Exactly. Exactly.
Erwin Szeto [00:53:08] You mentioned he has done about 50 laneway houses. This one was the bulk of them done. Is it has it been like a hockey stick or it’s been like ten each year type thing?
Ryan Craig [00:53:18] Well, those are all in varying stages of completion. I think we have what is it, about ten or 15 that are under construction or completed and then the balance are in varying stages of design and approvals. So it’s been it’s been a steady growth. We started off getting one or two projects a month and now we’re at a point where we get 3 to 5 new projects every month. So we’ve seen steady growth and that’s been pretty consistent with just the overall development pattern of the whole city. Like the first year the policy was in place, I think fewer than 100 applications were submitted and we’re going to start outpacing that by a substantial margin year over year. One of the one of the funny things that we’re noticing now is the neighbors actually wait until there’s a laneways suite on their street and then you kind of just see them all popping up. So now they’re streets where we have multiple properties and some of them side by side, which is good to see. But I think a lot of people kind of just wait to see that concept.
Erwin Szeto [00:54:18] What are people saying about these? So one of the neighbors thing about them are the tenants saying about housing.
Ryan Craig [00:54:23] Generally, we get positive feedback because they’re relatively restricted by the policy. They can’t be very large. I mean, there’s always going to be someone who’s upset about new construction occurring in the neighborhood, but almost always, especially when they’re completed, the neighbors are excited by it and we get a lot of compliments. The fun thing is that they can’t say anything about it until you’re under construction, so it’s not like a main house where they can object to it, prior approvals being issued, which is frankly the way it should be if you’re following the as of right bylaws. So it’s been a much stiffer reception because it. Just kind of starts happening and then it’s over and you can only reflect on it, so you can’t pre-judge it. I would say it’s been.
Ryan Craig [00:55:09] More.
Ryan Craig [00:55:09] Well received than houses that have to go to committee. For example.
Erwin Szeto [00:55:13] You talk about that always happens. Neighbors don’t like the construction noise to start with. When you’re building one of these to obstruct the lane, we.
Ryan Craig [00:55:20] Know we’re not permitted to. So staging is a big concern with these are contractors out to be very clever about how they stage materials on site, how they strategize deliveries and the like budget.
Erwin Szeto [00:55:33] For parking tickets.
Ryan Craig [00:55:34] So a lot of coordination is required. But yeah, I mean, you know, at the end of the day, you’ve got to keep the laneway open and build around.
Erwin Szeto [00:55:42] It’s fascinating. How many of these actually keep their garage.
Ryan Craig [00:55:45] Depends on the main house, I would say. So if you have a particularly large or luxurious main house, you’re going to want to keep a garage or that unit that’s not.
Erwin Szeto [00:55:56] An ambassador to the right.
Ryan Craig [00:55:58] Yeah. Yeah, that would be more like a self-build. Whereas if you have multiple units in the main house and you’re just purely looking to maximize revenue or awesome, what we’ll do is we’ll pull my house away from the laneway by a couple of feet so we can fit a parallel parking space between the house and the laneway, but not have an integral parking space that just invariably leads to a higher net operating income. So again, use case dictates whether you keep it or not.
Erwin Szeto [00:56:26] And then these laneway homes, this is essentially a self-contained home, has its own air conditioning, hot water tank furnace.
Ryan Craig [00:56:35] Everything can be separately metered. So your tenant are paying their own salaries. It’s literally a second home, a modest home, but a second home.
Erwin Szeto [00:56:46] For 1700 square feet is not modest.
Ryan Craig [00:56:50] 1700 is an outlier. The majority of our projects are around 1000 square feet. You need to have a pretty good want to get up to the maximum zone size of 1700.
Erwin Szeto [00:57:00] Sorry, I don’t mean to keep harping on the cost thing. What would a thousand square foot cost if that’s the typical.
Ryan Craig [00:57:06] So that’s I mean, we’re seeing those prices in the four hundreds kind of thing. Is it all.
Erwin Szeto [00:57:10] In budget cheaper than a turtle condo?
Ryan Craig [00:57:14] Big time. Big time. Once you already own the land, of course.
Erwin Szeto [00:57:18] Already on the.
Ryan Craig [00:57:19] Land.
Erwin Szeto [00:57:21] That’s cool stuff. And then what kind of tenant profiles are you seeing are these like, you know, blue collar folks that work at the automotive industry?
Ryan Craig [00:57:30] Yeah, the thriving downtown Toronto automotive industry, honestly, is a wide variety of tenants. They’re very attractive to families who are waiting to get into the housing market. So perhaps couples with a young kid or a dog will often see romance if you’re in a neighborhood near a college or just a kind of a vibrant downtown area. So it really depends. And it’s also dependent on the house itself. I mean, the big ones that act and feel like detached homes, those are very attractive to executives and families with high budgets. The tighter ones that might be in more vibrant neighborhoods would be more appealing to young couples.
Erwin Szeto [00:58:12] And then how much green space out of the way, too much yard space do they get in as it’s shared with the main house. They usually while they usually work it.
Ryan Craig [00:58:20] Yeah. So depending on the type of laneway suite you’re building, you have to step back from the main house a certain distance. So if you’re building a one storey house, then I believe it’s five, five meters that you have to set back buildings. Yeah, exactly. Versus if you’re building a two storey house then which the majority of the projects are, then you have to step back seven and a half meters from a main house.
Erwin Szeto [00:58:48] That’s not much.
Ryan Craig [00:58:48] And on top of that, there are there are requirements for soft landscaping, which are actually quite, quite stringent. So if you’re and that depends on the width of the property. So if the with is greater than six meters, then you need to have 85% solid landscaping in the backyard. And if it’s less, then you can have slightly less soft landscaping. And then there’s also a requirement for soft landscaping on the front. So on the part that is adjacent to the actual lane. So you need to have 75% sort of landscaping there. Unless you have a driveway, then that part is kind of exempted fast in terms of the functionality it’s really up to. You will often see the space between the house and the main house, either dedicated solely to the main house or to the house. Sometimes you’ll put a fence down the middle and split it house and house. That’s another thing that there’s no requirement to do anything there. It’s sort of what we’re supposed to be doing. Its own property.
Ryan Craig [00:59:48] Cool.
Erwin Szeto [00:59:49] All right, gentlemen, we’re running out of time here to tell you a bit more about the business and who is your typical client? What points folks should reach out to you? Tell me more. Sure.
Ryan Craig [00:59:59] So, I mean, we have clients that. Range from homeowners to investors. It’s a pretty even split, although we maybe have slightly more homeowners, like a more than 50%. Our designs will cover a wide range of use cases. Historically, it was either layaway suite designed for maximum revenue or one designed to accommodate a one for one. Although recently we’re seeing a rise in home offices and sort of additional space that complements the main house. So there are a lot of different use cases. Our clients ideally reach out to us as early as possible, like a lot of people will reach out to us before they’ve even purchased the properties to verify that it is developable. And like any design firm or project management firm. We’re happy to provide quotes and compete with other architects or whoever might be looking to work with you on your project and then work all the way through to design and approvals being completed, possibly managing construction as well. We really try to offer a full range of services and provide whatever requirements.
Erwin Szeto [01:01:06] And so you’ll even manage the construction. But you’ll, you’re referring general contractor and someone can really just hand you a check and sign some paper and really.
Ryan Craig [01:01:15] Yeah, I love it when people just hand yourself and say, don’t worry, you’ll get along with it. The majority of our clients hire their own general contractor and we just act as the design consultants. However, we offer a full range of services and we try to accommodate whatever clients need. So we can vary that to do as much or as little during construction as they want.
Erwin Szeto [01:01:38] My clients, typically from out of town, my typical client is from West GTA buying in Hamilton, St Catherine’s, Brantford. So they don’t have capacity necessarily beyond even on site once a week, right. In traffic, it’s back to traffic. It’s not the prettiest.
Ryan Craig [01:01:55] Can’t remember traffic and information, but.
Ryan Craig [01:01:58] Yeah, we can either access the construction manager or just the contract administrator is acting as a second set of eyes. So all that’s possible. Awesome.
Erwin Szeto [01:02:07] Awesome. That’s actually a common mistake. I think everyone should still make a visit to be on site once a week. But even if they do often enough, they don’t know what to looking at. Yeah, there’s a hole in the ground. Great. There’s a, there’s, there’s a, there’s a concrete pad, there’s, there’s concrete formed walls. They don’t know what they’re looking at the office know if it’s done right or not.
Ryan Craig [01:02:27] Yeah.
Erwin Szeto [01:02:28] There’s like, is it there or not? Does if it’s done right, it’s awesome. So. So I like to give some time to my guest to always share any final thoughts you want to share with folks without any prompting for myself, please go ahead.
Ryan Craig [01:02:44] Well, all I’ll say is it’s been an absolute pleasure and thanks so much for having us. For any of your listeners who are looking at properties and want to verify that it’s developable for Laneway Suite, this email the address info at Wayne State SEAL. We turn three property reviews, usually in a matter of hours, and also anyone who is interested in advocating for new housing policies follow us on our social media is our website landscape dossier and a lot. We need all the help we can get to make sure new policies like this are benefiting Torontonians. Awesome. Brian Yeah, no, I mean to tackle what Craig said. I mean, I think it’s really important to get educated. As we said before, there is a lot of misinformation out there. So work with to work with someone who knows what they’re doing. I mean, whether it’s us or someone else. And it is a matter of just make sure you get educated so that you have a good understanding if you can actually build one of these when we and because I mean, it’s obviously a lot pricier later on when you when you run the information. So it’s just always important to work with center work with a good team, as you know. And yeah, it’s been an it’s been an absolute pleasure to be on here when your podcast has provided tons of value to me over the last year or so. So super excited to have received the opportunity to be on call.
Erwin Szeto [01:04:05] Thank you for being here to give back. You know, if you guys have any sort of like sample communications that folks could send to the city councilors, for example, as you might pass them along here, I can post on my website, my website, if you have some post them on your own website, they’ll be awesome because we need to make things as simple as possible for everyone.
Ryan Craig [01:04:24] Because, I mean, I think that’s I think that’s what we did early on, right? Craig We kind of had a sample email template that people could just send to their councilors. Yeah, we’ll be launching the second seed soon.
Erwin Szeto [01:04:36] I think. I think people make is that they think people actually read this.
Ryan Craig [01:04:39] Stuff.
Erwin Szeto [01:04:40] On the other on the receiving end, it’s really just for or against.
Ryan Craig [01:04:45] Some of the.
Erwin Szeto [01:04:47] Some of the checking for or gains and we tallied.
Ryan Craig [01:04:49] Up.
Erwin Szeto [01:04:52] Well, we have more followers though. They have more NIMBYs. So now scrap this thing folks. You don’t, you don’t overthink it. It’s just. They’re just. Put it in their line early. Be nice. Playboy Are you for or against something? That’s all they care about is looking for a data point.
Ryan Craig [01:05:11] I will just mention one other thing before we go. I just remembered we do we do have monthly webinars. So for people that are interested in laneway suites, obviously it’s cater to the Toronto market, but it gives you a great primer on what these things are and what the requirements are and what you should be looking out for. So I mean, you can find that I think probably on our Instagram, just keep an eye out or Google it. You’ll find it.
Erwin Szeto [01:05:38] Amazing. Well, as does gardens, which become bigger. Sure, everyone’s been bugging you guys, but yes, you guys are early stages of something that could explode.
Ryan Craig [01:05:48] We’re past the laneway. Houses have already exploded and it’s amazing. It’s so great to see. Yeah. And there’s like 30 to 40000 properties. I think in the city alone I could potentially qualify. So I mean, it’s a huge opportunity, right?
Erwin Szeto [01:06:03] And then what do you think the upside is for? If garden suites become allowed, how many more properties there will be potential?
Ryan Craig [01:06:09] Significantly more than that.
Erwin Szeto [01:06:12] But like 100 times more or 50 times more. But it’s a lot more than that.
Ryan Craig [01:06:18] I mean, there are hundreds of thousands of backyards in Toronto that are ripe for secondary suites. So it’s going to depend on the policy and we’ll see. We’ll see. It could be big.
Erwin Szeto [01:06:31] And I look forward to it because I want one for each my properties. Gentlemen, thanks so much for doing this. Thanks for taking the time and sharing. And Ryan, thanks for reaching out and being on to give back. Thank you. All right, gentlemen.
Ryan Craig [01:06:45] This is great. Thanks for.
Erwin Szeto [01:06:46] Joining us, I. Before you go, if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already and sign up for my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s a much improved demonstration over the one that I gave to my cousin Chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As the real estate investor myself, I got into real estate for the cash flow, but with the rising costs to operate a rental business, it’s just not the same as it was 5 to 10 years ago when I started. Never forget that cash flow reduces your risk. The more you have, the more limbs you can absorb. And if you have none or limited cash flow, you’re going to be paying out of your pocket like I did on a recent basement flood at my rental in St Catherine’s, Ontario. If you’re interested in learning more for free from my newsletter at WDW dot Truth About Real Estate Investing Dossier into your name and email address on the right side will include in the newsletter when we announced our next Free Stock Tracker demonstration. Find out for yourself with so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell, I love teaching and sharing the stuff.