Is a Basement Suite Worth It? ROI Analysis for Calgary Homeowners

The Financial Case for Basement Suites in Calgary

With Calgary's housing market and rental demand, many homeowners are considering basement suites. Let's look at the numbers.

Typical Construction Costs

Legal Basement Suite (600-800 sq ft)

• Basic finish: $50,000 - $70,000
• Mid-range: $70,000 - $90,000
• High-end: $90,000 - $120,000+

Costs include:

• Permits and inspections
• Framing and insulation
• Electrical and plumbing
• HVAC modifications
• Fire separation
• Kitchen and bathroom
• Flooring and finishes
• Separate entrance

Rental Income Potential

Current Calgary rental rates (2024):

• 1-bedroom basement suite: $1,200 - $1,500/month
• 2-bedroom basement suite: $1,400 - $1,800/month

Annual income potential: $14,400 - $21,600

ROI Calculation

Example: Mid-range 1-bedroom suite

• Construction cost: $80,000
• Monthly rent: $1,400
• Annual gross income: $16,800
• Annual expenses (utilities, maintenance): ~$2,400
• Net annual income: $14,400

Simple payback period: 5.5 years

Property Value Impact

Legal basement suites typically add:

• 60-80% of construction cost to home value
• Appeal to house-hackers and investors
• Better financing options (suite income counted)

Tax Considerations

Rental income is taxable, but you can deduct:

• Portion of mortgage interest
• Property taxes (pro-rated)
• Utilities
• Maintenance and repairs
• Insurance
• CCA (Capital Cost Allowance) depreciation

*Consult a tax professional for your specific situation.*

Other Benefits

Beyond financial returns:

• Flexibility: Suite for aging parents or adult children
• Security: Extra presence in the home
• Mortgage Helper: Easier qualification for home purchase

Factors Affecting ROI

Positive factors:

• High-demand neighborhoods (universities, transit)
• Quality finishes attract better tenants
• Professional management reduces vacancy

Negative factors:

• Older homes may have more code compliance costs
• Low ceilings reduce suite appeal
• Poor neighborhood limits rental rates

Is It Right for You?

Consider a basement suite if:

• You plan to stay in the home 5+ years
• Your basement has adequate ceiling height
• You're comfortable being a landlord
• Your neighborhood supports rental demand

TrekStone Suite Development

We provide complete basement suite development including:

• Free consultation and feasibility assessment
• Full permit coordination
• Code-compliant construction
• Post-construction cleaning
• Landlord preparation assistance

Book your free consultation to discuss your suite project.