1.       Check city bylaws to ensure you’re legally allowed to convert part of your home into a rental unit. Be diligent with each stage of the renovation. Secure the proper permits and make sure you’re following the rules throughout the conversion.
 

2.       Make sure it’s worth the investment. You should be able to pay off the renovation costs within two years of rent. If you plan on charging $1,000 a month, the renovation shouldn’t cost more than $24,000.
 

3.       Whatever you budget, add 25 per cent. This is the general rule of any renovation, but it’s especially important when it comes to income properties. You don’t want the renovation to eat into any revenue from the rental suite.
 

4.       Make sure the space is livable. Legally, ceilings need to be almost 7 feet high. Look at the window size and general layout of the suite. The quality of the rental unit will dictate the quality of tenant, and how much you can charge for the suite. Take this into consideration as you budget furnishings and fixtures.
 

5.       See if you can cut costs on large projects. You need a separate entrance to the suite. If your home already has one you don’t have to build one.