3 Types of 2nd Suites to Make Big Money in Real Estate

It's very difficult to purchase a single family home these days at the minimum 20% down, and still get a decent cash flow. That's why it makes sense to buy a home with a legal 2nd suite. Having this will significantly increase cash flow, and unquestionably increase the value of the home itself. The issue is that most homes already equipped with legal 2nd suites are more expensive or unavailable. The key is that you'll likely need to put in the work to make them legal, since most of them aren't. The good news is that policy around 2nd suites are favorable right now, so you should definitely take advantage of that.

You might not be aware, but secondary suites aren't just in the basement, but also can be elsewhere. Right now, we'll discuss 3 common 2nd suite configurations that are guaranteed to net you some big bucks. 

Basement Suites

By far, the most popular type of 2nd suites are in the basement. Traditionally, basements were never considered a part of the usable home, other than for storage and housing of mechanical systems. That's why turning the basement into a second unit makes sense, since it doesn't interfere with the existing living space. As housing got more expensive, utilizing the basement space, whether for a recreational space or a separate suite altogether, made more sense.

Typical Post-war bungalows that are ideal for basement suites

Typical Post-war bungalows that are ideal for basement suites


They work best in bungalows, because of the available floor space. Essentially you have the same square footage in the basement as the main floor, which houses everything needed for a single family home, minus the mechanical room. Many homes also contain separate entrances, which are ideal entry points into the basement suite. 

One important factor to consider with basement suites is the possibility of water leakage, and the potential for mold development. This is why it's critical to ensure that any exterior water issue is addressed before constructing the unit, especially with older homes.

Second Floor Suites

Another common configuration is having the suite located on the second floor of the house. In this setup, the main unit will occupy the first floor and basement, while the second suite occupies the second or possibly even a third floor. This is popular in many downtown locations, where it's not feasible to turn the basement into an apartment due to the size. 

2nd floor suites are common in narrower homes where basement access is difficult

2nd floor suites are common in narrower homes where basement access is difficult


There is usually a common entrance area in the front of the house that separates the two units. All the rules that applied for basement suites also apply for second floor suites. Another consideration however, is addressing proper exits for occupants higher up in the house in case of a fire.

Vertical Split Suites

This is a newer concept that has only recently been implemented, and appears to be gaining popularity. Unlike what it sounds, you're not really splitting the entire home vertically into two, but rather just the main floor of a two storey home. This is done by creating a proper fire separated wall somewhere near the middle of the home. The main unit occupies the front portion of the main floor, which contains all the common spaces (living, dining and kitchen), as well as all the bedrooms on the 2nd floor. The second suite occupies the rear portion of the main floor, which also has all the common spaces. The basement contains all the bedrooms, which typically can comfortably fit 3 bedrooms.

Vertical splitting works well with detached and semi-detached homes, but hinges a lot of the existing configuration of the home, so you have to be careful when selecting a home to see if it makes sense to use this method. The real benefit of this method is so that the occupants of the second unit don't have to spend most of their time in the basement of the house. This can really be appealing for tenants, or anyone who might not like the stigma associated with living in a "basement apartment". 

This is a configuration I recently learned about from my friend Quentin D'Souza on his YouTube show Real Deal Renos, where he interviews Ryan Carr on implementing this strategy. This is something I'd definitely like to try out on my next conversion project.

Smaller semi-detached homes with 2 separate entrances are ideal for vertical split homes

Smaller semi-detached homes with 2 separate entrances are ideal for vertical split homes

This does reduce the overall common space for the main unit, but proper reconfiguration of the main floor into an open concept space can help to mitigate the reduction in size, and is a good compromise since it significantly enhances the appeal of the second unit. This concept is something that will work well in many detached and semi-detached housing stock in Toronto's core, and I believe will be a popular option going forward. I'll discuss this setup in more detail in an upcoming article.

How we can help

If any of these configurations are something you're interested in, I can help. I provide consultation and design services to help you turn that unfinished basement or existing 2nd suite into a fully functional legal one!

As always, if you have any questions, don't hesitate to contact us. Leave a comment below, and let us know what you think!