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Garden Suite ROI: ( Real Numbers Explained )

  • elaheea77
  • Jan 8
  • 2 min read

Garden suites are often marketed as a smart investment — but what does the return on investment (ROI) actually look like in Ontario?

In this guide, we break down real numbers, typical costs, rental income potential, and long-term value so homeowners can make an informed decision before building a garden suite.


prefab garden suite backyard

What Is ROI in a Garden Suite?

ROI (Return on Investment) measures how much value or income a garden suite generates compared to what it costs to build.

For garden suites, ROI usually comes from:

  • Rental income

  • Increased property value

  • Long-term housing flexibility


Typical Garden Suite Costs in Ontario

While prices vary by design, size, and site conditions, most garden suites in Ontario fall within a predictable range.


Key cost components include:

  • Design & permits

  • Foundation & servicing

  • Structure (prefab or on-site)

  • Interior finishes

  • Utility connections

Prefab garden suites often offer better cost certainty and shorter build timelines.

Rental Income: What Can You Earn?

Rental income depends heavily on location and unit size.

Typical monthly rent (Ontario urban areas):

  • Bachelor / 1-bedroom garden suite: strong demand

  • Long-term rentals tend to outperform short-term rentals in stability

Over time, consistent rental income can significantly offset the initial build cost.


ROI Example (Simplified Scenario)

Assumptions:

  • Garden suite built on an existing residential property

  • Long-term rental use

  • Stable rental market

Results:

  • Monthly rental income contributes to ongoing cash flow

  • Property value increases due to added dwelling unit

  • Long-term ownership significantly improves overall ROI

Exact ROI varies by municipality, zoning rules, and financing structure.

Property Value Impact

A legal garden suite can increase property value by:

  • Adding a second dwelling unit

  • Increasing rental potential

  • Making the property more attractive to investors and multi-generational buyers

Buyers often value legal, permitted garden suites far more than informal additions.


ROI Beyond Rental Income

Not all ROI is monthly cash flow.

Garden suites also provide value through:

  • Housing family members

  • Aging-in-place solutions

  • Home office or guest space

  • Future rental flexibility

These benefits reduce future housing costs and increase long-term financial resilience.


Prefab vs Traditional: ROI Differences

Prefab Garden Suites

  • Faster completion → earlier rental income

  • Predictable pricing

  • Lower risk of cost overruns

Traditional Construction

  • Greater customization

  • Potentially higher costs and longer timelines

Faster time-to-completion often improves ROI more than small design upgrades.

Taxes, Financing & Operating Costs

Homeowners should consider:

  • Property tax adjustments

  • Insurance changes

  • Maintenance and utilities

  • Financing interest (if applicable)

A proper ROI calculation always accounts for net income, not just gross rent.


Is a Garden Suite a Good Investment in Ontario?

A garden suite can be a strong investment if:

  • Zoning allows a legal unit

  • Demand exists in your area

  • Build costs are controlled

  • The suite is designed for long-term use

ROI is strongest in urban and high-demand rental markets.


Get a Real ROI Estimate for Your Property

Every property is different.

At Snap Hub Homes, we help homeowners evaluate:

  • Zoning feasibility

  • Build costs

  • Rental potential

  • Long-term value



Want real numbers for your lot?

Book a consultation and get a personalized ROI assessment.

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