"Building an income suite is the most profitable kind of homeowner reno, one that creates real value for your home," says the host of Income Property, which heads into its seventh season this winter.
The show’s appeal hinges on its host, who offers house-poor homeowners frank advice on creating legal income suites to offset their mortgage payments. And though he’s blunt with his counsel, Mr. McGillivray says it with a grin that could charm the most churlish of landlords.
His Income Property team has gone the extra mile for homebuyers in dire straits. "We’ll work with them to see if they may have any equity, or can get a line of credit or a small loan," says Mr. McGillivray. "We’ll get contractors to donate time and try to get it done. We’ve never walked away from anyone."
Naturally, Mr. McGillivray himself owns multiple properties. He lives in a two-storey, fieldstone-faced home in the Riverstone Golf and Country Club community in Brampton, ON. Though he owns more than 20 income properties (in Kitchener-Waterloo, Guelph and Vaughan), this is the first private residence he’s purchased with his wife, Sabrina.
At 3,100-square-feet, the home is spacious enough for entertaining their frequent extended-family gatherings. "We have yet to find a suitable table for the dining room," notes Mr. McGillivray. "To fit everyone in, we bring out a long table that spans the dining and living rooms. We may need to redesign this so it works better for us when we entertain."
The couple have projects aplenty. Over the next year, they’ll put in a fence across their 145-foot backyard expanse, landscape the grounds, and build a two-tier patio deck linked to the kitchen by French doors. The work-in-progress kitchen (Mr. McGillivray has just put in pot-lights) will have granite countertops and backsplashes.
Up from the granite tiled foyer, a winding oak staircase leads to the master bedroom and ensuite, originally set out as an open-concept space. "The bathroom was divided from the bedroom by big pillars, but we thought it best for privacy’s sake to [remove] the pillars, frame in an entry, and install double doors," explains Mr. McGillivray. "Sabrina, who usually gets up very early in the morning, can blow her hair dry while I snooze undisturbed," he says.
Mr. McGillivray also plans to finish the basement, and has even ordered the materials for the job. He intends to to take advantage of the government’s Home Renovation Tax Credit, saving the full $1,350.
In decorating their home, the couple chose an abundance of abstract paintings (the TV host likes the art form’s randomness) and an eclectic mix of furnishings — a mirrored buffet in the dining room, a crystal chandelier over the bathtub, a (slightly scratched) Art Deco coffee table, a touchless Kohler faucet in the powder room.
"We look for individual pieces to build a room’s theme around," Mr. McGillivray says. Whether it’s a $600 club chair from a high-end boutique or a $125 lounge chair from a big box store, if it fits the room and is comfortable, it’ll work, he says.
In his own work with Income Property, he’s the picture of comfort. "That’s because I’m doing what I do best," he says.
Though just 31, he’s been finding, fixing and, at times, flipping homes for the past decade. "I began exploring rental properties when I was in university," he recalls. "I was a renter as a student at the University of Guelph (where he received an honours degree in marketing management), and I couldn’t find a place to rent."
Then, through a school project, in which he teamed up with classmate Michael Sarracini, they studied supply and demand. "I looked at rental properties, and came up with this formula that worked really well. Instead of spending our student loans on rent, we pooled our resources toward closing costs and a down payment on a house, our first income suite development property. I lived there and fixed it up to rent and eventually I did another one, and another, and it went from there."
What should people look for in an income property? A separate entrance for privacy and convenience, good ceiling height ( "if it’s too low for you to live in, it’s too low to rent"), and an extra parking spot which could be worth up to $100 per month.
"My bottom line is if it’s going to cost more than two years’ worth of rent, don’t even bother," Mr. McGillivray insists. "If I have to spend, say, $24,000 on a place, I must get a thousand dollars worth of rent per month. That way, my space has paid itself off in two years. The rest is gravy."
The Income Property Process: Scott McGillivray’s Top 5 Tips
1. Your income property should meet your own standards. Tenants won’t settle for less than you would. Fix the place up so you can charge more and attract better tenants.
2. Don’t skimp on the drywall, especially on the ceiling. Not only as a fire barrier between you and your housemates, but also as an extra layer of sound-proofing.
3. When renovating your space, add 25% over a professionally quoted budget. If you do go over, at least you were expecting it. If not, nothing lost.
4. Look for an income property that’s close to home, ideally within an hour’s drive of where you live. It has to be convenient for you to check up on and manage.
5. Beware, houses are like onions. The more layers you peel back, especially while demolishing, the more problems you’re likely to find. Count on hidden issues like mould, live wires and any other hidden costs, just in case.