Secondary Dwelling Units (SDUs) in Ottawa: A Smart Investment Opportunity

Jan 22

If you're considering investment properties in Ottawa, understanding Secondary Dwelling Units (SDUs) can open up exciting opportunities. SDUs, commonly known as basement apartments or granny suites, are becoming a popular choice for both homeowners and investors looking to maximize rental income. Whether you're looking for rental income or seeking ways to increase the value of a property, SDUs offer flexibility and a steady stream of cash flow.

What is an SDU?

An SDU (Secondary Dwelling Unit) is a self-contained living space within a larger residential property, often located in the basement or an additional floor. These units typically have their own entrance, kitchen, bathroom, and living areas. In Ottawa, bungalows with side entrances are particularly common for this purpose, as they provide ample space for converting the lower level into a legal and functional SDU.

Why are SDUs a Good Investment in Ottawa?

Investing in properties with the potential to include an SDU is becoming increasingly popular for a number of reasons:

Rental Income
One of the most attractive features of SDUs is the ability to generate consistent rental income. With Ottawa’s demand for rental properties, especially in areas like Centretown, Kanata, and Orleans, an SDU can provide a stable revenue stream. Renters often prefer the independence of a separate unit, making SDUs appealing to tenants.
Increased Property Value
Converting a basement or additional space into an SDU can significantly increase the value of a property. Not only do you benefit from rental income, but the property’s market value rises as well. Many buyers are drawn to properties with the added flexibility of an SDU, as it can be a source of passive income or a space for extended family.
Flexibility for Homeowners and Investors
For homeowners, an SDU can provide extra income while living in the property. For investors, it can be a way to maximize the return on investment by offering rental opportunities in desirable areas of Ottawa. It’s a win-win for those looking to enter the Ottawa real estate market.

What Makes a Lower Level a Legal SDU?

Not all basements or secondary units qualify as legal SDUs. To ensure your lower level meets the requirements and is legally recognized, here are a few key factors to consider:

Zoning and Permits
The first step in making a basement a legal SDU is ensuring the property is zoned for it. Ottawa’s zoning by-laws determine whether secondary units are permitted in a particular area. Before beginning any renovations, it's important to check with the City of Ottawa for zoning information and to apply for the necessary permits.
Separate Entrance
A legal SDU must have its own separate entrance from the main part of the house. This ensures privacy for the tenants and complies with safety regulations. Many homes with side entrances make this process easier, as they provide a direct and independent entry to the lower level.
Building Codes and Safety
To qualify as a legal SDU, the unit must meet specific building codes, particularly for safety. This includes fire safety standards, such as fire-rated doors and windows that provide emergency escape routes. Additionally, the unit must have sufficient ceiling height (typically at least 6.5 feet) and proper ventilation.
Parking Requirements
Depending on the location and size of the property, parking may be required for the tenants of the SDU. Ensure there is enough space for parking, especially in more suburban or residential areas of Ottawa where street parking might be limited.
Utilities and Functionality
The SDU must be fully functional, with its own kitchen, bathroom, and living space. Additionally, the unit should be independently metered for utilities like electricity and water, ensuring that both the main home and the SDU can be billed separately.

Bungalows with Side Entrances: Ideal for SDU Conversion

In Ottawa, bungalows with side entrances are often the perfect candidate for SDU conversion. These homes typically offer more square footage, allowing you to utilize the lower level as a separate living area. The open layout of bungalows makes it easier to renovate the basement into a legal, self-contained unit.

Whether you're looking for an investment property or planning to create a rental income stream from your own home, bungalows in Ottawa can provide a solid foundation for building a legal SDU.

SDUs as a Profitable Investment in Ottawa

Secondary Dwelling Units (SDUs) are an excellent option for investors looking to generate rental income in Ottawa. By investing in properties with the potential for an SDU, you can maximize your return on investment while contributing to the growing demand for affordable rental housing. Understanding what makes a lower level a legal SDU, including zoning, safety standards, and permits, is essential to ensure your investment is both profitable and compliant.

If you're interested in exploring properties with SDUs or learning more about the Ottawa real estate market, feel free to reach out. Investing in SDUs can be a rewarding strategy for homeowners and investors alike, especially as rental demand continues to rise in Ottawa.