How to Turn Your Basement Into an Apartment: 8 Easy Steps

Converting a basement into an apartment with kitchen and bathroom facilities allows homeowners to earn extra income if they rent out the space. A home with a basement suite is also highly likely to increase the property's value, especially if the owner wants to sell one day. However, the proper permitting needs to occur before the conversion, and owners should be comfortable being a landlord, as they will be renting a portion of their home to a tenant. For anyone thinking about converting a basement into an apartment, here's how to do it.

8 Steps For Turning Your Basement Into a Legal Apartment

• Confirm zoning regulations and eligibility for a secondary suite in your area.
• Obtain required development and building permits from the City of Calgary.
• Ensure the suite has a separate entrance, bathroom, and kitchen.
• Install egress windows in all bedrooms for emergency escape.
• Add interconnected smoke alarms and carbon monoxide detectors.
• Ensure compliance with fire safety and building code requirements.
• Install a separate heating system if required (for suites after March 2018).
• Schedule inspections to verify compliance and finalize the permit process.

Is It Legal to Convert Your Basement into an Apartment?

The answer to this question can vary from one municipality to another. In municipal areas where basement apartment conversions are allowed, there are usually multiple permits required to complete the process:

• Development permit
• Building permit
• Homeowner permit
• Contractor trade permit

This permitting process ensures the safety of the dwelling and is essential for some of the following steps. The permit expires if the improvements to convert the basement into a secondary suite are not completed by the deadline. The homeowner may need to reapply for the permits and pay fees a second time.

There are other things to ask about before converting a basement into an apartment. For example, many municipalities will only allow a property to have either a basement apartment or a backyard apartment, but not both. In many cases, homeowners may only convert a basement into a single apartment rather than two or more smaller units.

Inspect the Space

Is the basement ready for conversion, or do improvements need to be made first?There are a number of key differencesbetween finished and unfinished basements. For example, there will be municipal ceiling height requirements to meet. If a basement ceiling is too low, the owner may have to dig down or raise the home before converting the space.

Windows need to be the right size so that occupants can escape in the event of a fire. Humidity and dampness in a basement are also important factors for a renter's comfort. The best humidity range inside a home is 40 to 60 percent. The basement should also be inspected for mould because basements are inherently damp. Mould remediation may be necessary for a tenant's safety before building.

Because of the dampness in basements, wood rot tends to set in. This is another problem that should be inspected before starting the conversion process. If the floor joists, wooden window plates, or other wooden features are beginning to rot, replace those first.

Air quality is also a critical consideration. If an HVAC system is in the basement, have the air quality tested to ensure safety.

Plan For a Separate Entrance

Planning for a separate entrance in your basement apartment is crucial for both legal compliance and tenant convenience. Many municipalities, including Calgary, require a private, independent entryway as part of the building code for secondary suites. This ensures the safety of occupants by providing an accessible emergency exit in addition to the main pathways. A dedicated entrance enhances privacy for both the tenant and the homeowner, allowing each party to come and go freely without intrusion. This setup also improves the marketability of the rental space, making it more appealing to potential tenants.

When designing the separate entrance, consider the location and accessibility. Ideally, it should lead directly from the exterior to the basement without passing through the primary dwelling. You may need to excavate to create a walkout entrance or modify existing windows into egress doors if the basement is partially below ground level. Proper planning ensures the design is functional, aesthetically pleasing, and compliant with local regulations. It's also wise to invest in adequate lighting, secure locks, and weatherproofing for safety and comfort. A well-executed separate entrance adds value to your home while providing tenants with a welcoming, independent living space.

Determine the Floor Plan

When creating a floor plan, the owner should consider everything they would want from a regular apartment. For example, to make a basement apartment more attractive to most renters, it should have a separate entrance from the main house. A full kitchen with a dishwasher is another way to impress renters and command a higher rent price. The same goes for an in-unit washer and dryer.

Basements tend to be colder than the rest of the home, so a gas fireplace is another upgrade to consider. However, this also requires a natural gas hookup, so keep that in mind when planning the space. What's the shortest distance to connect a gas fireplace to city services? That's where the fireplace and living room should be situated.

When it comes to a bathroom for a basement apartment, a shower/tub combo is more impressive to renters than a shower or a tub by itself. Additionally, an open floor plan makes a basement apartment seem larger and takes better advantage of natural light.

The owner also has to work within some obvious size constraints. It can be helpful to work with an experienced contractor to develop a floor plan for a basement apartment.

Add Heating, Cooling, Electrical, Plumbing & Insulation

Next, install all the necessary utilities according to local building codes. Basements are often one of the most neglected parts of a home, so electrical outlets and sockets might be old or out-of-date when it comes to more recent codes. Heating, cooling, electrical, and plumbing are necessary before one even considers renting a basement unit. Effective insulation on the walls will also be essential to save energy.

Utilities for a basement apartment will almost always hook up to the main home's utilities, and the owner will need to decide how to charge for them. Will a flat fee be added to the rent to cover water, gas, and heat? Or will the renter be charged a percentage of each utility bill every month?

Once the utilities are hooked up, it's time to put any last finishing touches on the basement apartment and install any necessary appliances. Once a basement apartment is ready to rent, it should have all the amenities someone could expect from a regular apartment building.

Frequently Asked Questions

How Much Does It Cost to Convert Your Basement to an Apartment

Converting your basement into a legal apartment in Calgary can be a significant investment, with costs influenced by various factors such as the size of the space, desired finishes, and necessary structural modifications.

The cost typically ranges from $40 to $100 per square foot, depending on the complexity and quality of the materials chosen. For a standard basement development, expenses generally fall between $35,000 and $70,000 or more, influenced by factors like the inclusion of bathrooms, kitchens, and custom features.

Can the Multigenerational Home Tax Credit Be Used for a Basement Apartment?

The Multigenerational Home Renovation Tax Credit (MHRTC) is a Canadian federal initiative designed to assist families in creating secondary housing units for eligible family members. If you're considering converting your basement into an apartment to accommodate a senior relative or an adult with a disability, this tax credit can help offset some of the renovation costs.

You can claim 15% of your renovation expenses, up to a maximum of $50,000 in qualifying expenditures. This equates to a potential tax credit of up to $7,500.

The secondary unit must be intended for a family member who is either:

• 65 years of age or older by the end of the tax year; or
• 18 years of age or older and eligible for the Disability Tax Credit at any time during the tax year

Converting a Basement into an Apartment Is a Good Investment

There are several great reasons to convert a basement into an apartment. Renting out an apartment to someone else can reduce the monthly mortgage payment and add a decent amount of value to the home's worth. Additionally, a basement apartment is a good way to accommodate a parent who's downsizing after retirement. The main thing to remember is that owners should follow all local building codes to ensure success, from the beginning of the permit process until the first rental contract is signed.