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With economic uncertainty and skyrocketing real estate prices in metropolitan areas, the idea of owning a home for your nuclear family seems increasingly unrealistic. Today, more Canadian families are choosing to live together in multi-generational housing.
As a real estate investor, making improvements to reflect this trend can benefit you greatly. When multiple generations live on the same property or in the same home, renovations that increase privacy and offer additional space can be a welcome solution for those who can’t afford separate housing.
But first, if you are interested in learning how you can finance multi-generational housing, click the link below for a free strategy call today.
A trend toward multi-generational housing
Multi-generational housing is defined as homes in which three or more generations live in the same house or on the same property. This habitation style has increased by 37 percent between 2001 and 2016, while renovations to accommodate multi-generational families rose 46 percent between 2008 and 2017. This increase points to a pressing need for suitable housing as well as an opportunity for landlords and investors.
Why is multi-generational housing so appealing? For many, the idea of living with your parents (or grandparents) is less than ideal; however, sharing the tax, mortgage, utilities and maintenance burden is beneficial enough to make the move. Experts suggest that the rising cost of living, especially in urban centers, is making it particularly difficult to move out and purchase—or rent—homes for the single nuclear family. Living together can enable the younger generation to save up for their own home, rather than relying on the older generations to make a gift for a down payment or waiting to inherit a single-family home.
For many ageing adults, having the security of ageing-in-place with their adult children nearby is compelling, as well as the opportunity for grandparents to help contribute to childcare duties and costs. It’s also a way to stay in an urban area with better schools, shopping, entertainment options, public transportation and other benefits of city life, all while saving money.
Additionally, indigenous and immigrant populations continue to grow and bring their cultural attitudes towards multi-generational housing into Canada’s urban centers. Many cultures traditionally embrace families living together even when the children reach adulthood, increasing demand for multi-generational housing. As the population’s ethnocultural composition changes, we can expect to see the trend continue over the next 10 to 15 years, if not longer.
Discover How To Rent A Property With This Step By Step Guide
Trends in multi-generational housing renovations
Real estate developers and renovation contractors have noted this trend. In Vancouver, Novell Design Build said that 90 percent of their clients want multigenerational housing. In Edmonton, Parkwood Masters Builders said that 50 percent of their business comes from multi-generational families wanting to renovate their homes to accommodate the larger household. In 2017, Canadian families spent about $57 billion on renovating their homes, which is about the same as what they spent on buying new homes.
Vancouver alone is seeing a huge influx of people applying for permits to build lane-way homes and infill buildings as well as interior renovations designed to add more living space. That’s because the average home price in Vancouver is $1.4 million, compared to the national average of $515,000—which is still out of reach for many Canadians.
Laneway homes are detached secondary buildings, or suites, that are built on an existing property. You might have heard them referred to as “granny pods” in recent years. They offer additional privacy for a family while remaining close to the larger home. The term “lane-way” refers to their tendency to open up into the back lane, offering additional separation. Not counting permits, they could cost as much as $350,000 to build—which is still significantly cheaper than the average Canadian home price today.
Infill buildings are additional housing units that are built-in already-existing subdivisions and neighbourhoods. They could be built new like lane-way homes or could refer to existing homes that are divided into separate units.
Of course, there’s always the in-law suite, which typically is attached to the main house. They often offer separate entrances as well as a private kitchen and bathroom. This can be ideal for moving in ageing parents without building a separate unit.
How to make your property more appealing to multi-generational renters
The Urbaneer suggests that in addition to all the things that nuclear family renters look for, like the size, nearby amenities, aesthetics, overall layout and more, a multi-generational family is going to need some specific additional considerations. “Homes must be spacious enough and laid out appropriately to accommodate all family members…or the dwelling must have the potential for specific renovations that could accommodate more family members over time.” Naturally, the renovations will apply to buyers, not renters—but it’s a helpful gauge if you’re looking to invest in a property that can be renovated for a multi-generational housing rental.
When you’re considering renovations to your rental properties, think like a multi-generational family: the closeness can be an appealing factor, but each family needs to have their own separate space. If the family will be living all under one roof, separate entrances, kitchen suites and living areas are all smart ways to add a sense of privacy in close quarters. The most important consideration, of course, is space: your property needs to accommodate several adults and, potentially, multiple children.
You may consider making at least one area of the home suitable for ageing in place, which can include widened doorways, accessible bathroom and kitchen fixtures, and even flooring designed to be friendly to those with mobility issues. In fact, “Vancouver Special” homes, where the bedrooms are on the ground floor and the main living quarters are upstairs, are ideal for these types of renovations.
Planning for multi-generational renters is planning for the future
Experts predict that the demand for multi-generational housing won’t be going away anytime soon. With 2.2 million Canadians living in multi-generational housing, and changing ethnocultural composition, we can expect the trend to continue for some time.
As a real estate investor, it’s important to stay in tune with the latest Canadian housing trends to ensure you’re making an investment that can fetch you top dollar as a rental or when you decide to sell.
Once again, if you are interested in learning how you can finance multi-generational housing, click the link below for a free strategy call today.