Can I Use a Second Bedroom as a Mortgage Helper?

Q: I want to buy a two-bedroom condo but I’d like to rent out the second bedroom to help with the mortgage, like a mortgage-helper suite in a house. Are there rules around this in condo buildings?

A: Some strata corporations have very strict rules when it comes to rentals. It’s always important to look through the documentation before fully signing off on the transaction so you know exactly what you are buying into. The strata council also has the authority to change the rules anytime they want, as long as they have the proper consensus. Generally a strata building will fall into one of three categories: those that allow rentals unrestricted, those that allow rentals with restrictions as to the number of rentals in the building, and those that don’t allow rentals at all.

So if you purchase a two-bedroom condo and want to rent out the second bedroom, is this a concern for you? It’s not, as long as you are the primary resident in the condo. Rental rules are generally designed to curb or allow renters as the primary occupier of the suite. So if you are the primary occupier of the suite, the rules won’t affect you.

Renting out part of your property is a great way to free up some of your income. But one aspect that people often get confused about is whether or not the potential income of a rental suite or bedroom will increase the mortgage amount they are able to qualify for and borrow. It can, but this can be quite limited, depending on the lender you connect with. As a rule of thumb, you need to qualify for most of the financing on your own capability, and the potential rental income will need to be appraised by the lender before it is included in your financing arrangement.

Working with a dedicated mortgage professional will help you understand this in greater detail, and show you all the options available. Having a rental income is a great way to increase your disposable income, or to pay down your mortgage at an accelerated pace. It’s definitely worth exploring.