Should You Add a Secondary Suite? Here’s How to Know If It’s Worth It
- Wayne Hillier
- May 6
- 3 min read
By Wayne Hillier, Real Estate Investing Masters
May 6, 2025 | Edmonton, AB
One of the most common strategies we see among Canadian real estate investors is the BRRRR method — Buy, Renovate, Rent, Refinance, Repeat. And while the strategy sounds straightforward, one key decision often gets overlooked:
Is it actually worth it to add a basement suite?
The truth is, not every property is a good BRRRR candidate. And not every renovation leads to higher value or better cash flow. Today, we’re breaking down how to make smarter decisions before you spend a dollar on drywall.
🧠 Step One: Know Your ARV
Before you even pick up a hammer, you need to estimate your After Repair Value (ARV). This is the price your property will likely appraise for after renovations are complete.
The best way to estimate ARV?
Look at recent sold comparables (not just active listings).You want to find similar homes — same square footage, location, and finish level — that already have legal basement suites.
💰 Step Two: Run the Math
If your ARV is too close to your total investment (purchase price + renovations + holding costs), the deal might not work.
Ask yourself:
Can I refinance and get most of my capital back?
Will the new suite generate enough rent to justify the cost?
What will my cash flow look like after refinancing?
Too many investors skip this step and assume every suite = value. But in reality, some basement suites cost $50K+ and only raise the ARV by $30K.
🔧 What About Purchase Plus Improvements?
If you’re buying a rental and want to add a suite without using your own cash, ask your broker about Purchase Plus Improvements. This product allows you to finance renovations as part of your mortgage — but it works best when:
You’re not trying to BRRRR and refinance quickly
You have a contractor quote ready at purchase
You plan to add long-term value (not cosmetic flips)
📉 Don’t Rely on Rent to Justify the Renovation
Yes, adding a suite might increase your rent by $1,000/month — but if you can’t pull your capital back out, your ROI will take a hit.
Focus on the combined value lift and long-term cash flow — not just higher rent.
✅ The Bottom Line
The BRRRR strategy is powerful — when used with discipline.
But adding a basement suite just because “it worked for someone else” is a recipe for tight margins and stress.
Know your numbers. Pull your comps. Stress test your refinance. And if the deal doesn’t work on paper — walk away.
🎧 Want the Full Breakdown?
In today’s episode of The Real Estate Investing Morning Show, Wayne and Gabby dive into real examples, warning signs, and how to stress test your next suite addition.
Catch the full discussion here:
🔗 Spotify
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