How To Profit From The Growth Of Multi-Generational Homes

We know that secondary suites help meet the demand of specific tenant groups due to affordability. These may be single parent households, elderly on a fixed income, students or young people starting out. The lower cost of a secondary suite is more attractive compared to a single family home or even a condo. Heck, it might even be the only option for these folks.

Another demand we don’t often think about are homes with secondary suites for multi-generational households. I'll explain by sharing my own story. The experience from my personal circumstances is one of the primary reasons for me starting a business around secondary suites, and I absolutely see this playing a major role in the future of our housing arrangements.

It Started With The Financial Crisis 

In 2009, I was renting a condo in downtown North York.  With the lower property prices from the financial collapse, I was eager to get into the market as an owner. Unfortunately, all my wife and I could afford was a condo. With the intention of starting a family soon, we didn’t like the idea of condo living with kids.

My parents were also renting a house at the time, and had a boatload of stuff so a condo wasn’t going to cut it for them either. (No seriously…my dad had a fishing boat with about 800 rods in it - and he needed to park that somewhere).

To make a long story short, we put 2 and 2 together, and instead of my family and I taking on a pile of debt, we decided to combine the equity from their previous house along with my life savings to buy a larger detached back-split home and divide it up into 2 separate units. One for each of us.

Demand For MGHs (Yes I just created an acronym for multi-generational homes)

 There are 4 reason why multi-generational living in North America is a trend that is only going to get….umm….trendier. Sorry that's the best I can come up with….we’ll go with that.


The GTA and Hamilton area is expected to receive 3.5 million new immigrants in the next 25 years (more than Toronto's population now). That's 140,000 people a year. In addition to a higher demand for housing in general, immigrants are starting new financially, so sharing accommodations helps. Couple that with many cultures who are accustomed to living with family members, more MGHs simply make sense. (1)

140,000 more smiling faces every year

140,000 more smiling faces every year

Elderly Parents

An aging boomer population with inadequate public resources and insufficient homes for seniors means that more people will be taking care of their parents as they approach their golden years. Having parents close by makes it much easier to do so. In the US, more than 51 million Americans (around 1/6 of the population) lives in a multi-generational home, and this is expected to grow. (3)

Young Adults

Statistics show that younger people are staying at home longer. The percentage of 18-34 year-olds living with their parents is the highest in history, according to the PEW research center. There is typically no other reason for this other than financial difficulty. Let's face it, 20 something year-olds don't want to live with their parents and their parents don't want to live with them (for the most part). This segues us into the last driving factor. (3)

Affordable Housing

The high cost of home ownership has a role to play in all of the 3 items outlined above, but houses being so incredibly expensive in and of itself has perhaps the biggest role in forcing people to share a roof with family members and relatives. In Toronto, the average single family home is now over a million bucks. The only way many young families are able to access certain school districts and community amenities is to live in one portion of a multi-unit home.(4)

So these are the 4 primary reasons why multi-generational homes is going to be......MASSIVE! (There…that’s better). 

How You Can Apply This Strategy

So if you're buying a house, whether it's for your own living, or entirely as an investment, it really makes sense to consider a home which can be easily converted to a legal 2 unit, or even a 3 unit building. This unquestionably will create a very valuable piece of real estate that will be in demand from those people who want or need to live under one roof with their families. You will likely get greater cash flow if you're renting it out, or much more money come time to sell.

If you're living in it, ask yourself if you have close family, relatives or even very good friends (BFFs if you will) who you can share a home with. Yes there will be things to address and issues to sort out, but you will be much better off financially if you do.

If you want to know which type of properties to buy, I strongly recommend houses in proximity to the core, sitting on a sizable piece of land. With provincial mandates for intensification of cities and reduction of urban sprawl, low rise properties will see continued demand.

War-time neighborhoods offer the best land size to property size ratio

War-time neighborhoods offer the best land size to property size ratio

I really like post-war bungalows in many of the outlying core areas, for a number of reasons. I wrote about that in Post-War Bungalows - Why They Are Perfect For Adding 2nd Suites. The larger lots of many of these homes and excellent existing infrastructure (sewers, utilities, etc.) can potentially be redeveloped into multi-unit properties once zoning by-laws are updated to reflect our new reality. In the future, you might even get bought out by a large condo developer for a king's ransom.

Now's a good time to look into these. As a matter of fact, I'm looking to purchase one very soon as an investment, and put guess it....a legal secondary suite!

A Win-Win-Win

For me personally the benefits of doing what I did was immense. Instead of stretching myself financially for my own house, I was able to allocate the extra funds to invest in 4 different properties over the past 6 years.

That has put my family in a relatively comfortable situation financially.  It allowed us to do a lot of what's important to us, such as saving for our kids' education, as well as annual extended trips to Japan (my wife's home country), and a ton of other places.

This past March visiting an agricultural heritage village in Kyushu, Japan - That's me the Jays cap!

This past March visiting an agricultural heritage village in Kyushu, Japan - That's me the Jays cap!

Moreover, having my folks nearby also helps alleviate a bit of the insanity with our 1 and 3 year olds and allows them to spend more time with the grand kids. More importantly perhaps, is sharing a roof enables me to keep an eye on my aging parents.

And the great thing about a secondary suite is that it is an entirely separate unit. This means that even though we're close to my parents, it's not uncomfortably close!