Turning unused space into a legal basement suite remains one of the most affordable and effective entry points into the rental market. For Canadian investors, it’s a classic house-hacking strategy that can offset your mortgage, generate steady rental income, and boost resale value.
In 2025, several cities stand out with strong rent-to-price ratios, high tenant demand, and policies that support legal secondary suites.
Why Basement Apartments Work for ROI
- Lower entry cost – One property, two income streams.
- High demand – Basement units are often more affordable than condos or purpose-built rentals, keeping vacancy rates low.
- Mortgage offset – Suite income helps cover monthly payments, improving financing power.
- Value boost – A legal conversion can significantly increase resale appeal.
Top Cities for Basement Apartment ROI in 2025
1. Edmonton, Alberta
- Average home price (July 2025): $463,078 (avg) / $427,800 HPI
- Average rents: 1-bed $1,295, 2-bed $1,629
- Why it works: Alberta has no rent control on amount (only one increase every 12 months). Edmonton’s 2024 zoning reform legalized suites citywide with simpler permits.
- ROI angle: Lower buy-in vs. Ontario/BC markets = faster payback on renovation costs.
2. Calgary, Alberta
- Average home price (July 2025): $616,686 (avg) / $582,900 benchmark
- Average rents: 1-bed $1,685, overall avg $1,914
- Why it works: Calgary’s growth in tech and energy drives demand. The city has a Secondary Suite Registry and an Incentive Program that offers up to $10,000 for qualifying upgrades.
- ROI angle: Higher rents relative to modest property taxes = strong cash flow potential.
3. Hamilton, Ontario
- Average home price (July 2025): $767,654
- Average rents: 1-bed $1,675, 2-bed $1,995
- Why it works: Proximity to Toronto and ongoing GO Transit expansion make Hamilton attractive to commuters. The city’s updated ADU framework supports internal and detached suites.
- ROI angle: Legal secondary units can add resale value in a competitive GTA-adjacent market.
4. Winnipeg, Manitoba
- Average home price (July 2025): $399,016 (all types); Detached $443,635
- Average rents: 1-bed $1,425, 2-bed $1,741
- Why it works: Winnipeg remains one of Canada’s most affordable major cities with steady rental demand. City bylaws permit secondary suites with clear size and permit requirements.
- ROI angle: Low buy-in and above-average rent yields = consistent cash flow.
5. Halifax, Nova Scotia
- Average home price (July 2025): $580,449 (all types); Single-family avg $609,440
- Average rents: 1-bed $2,095, 2-bed $2,595
- Why it works: Halifax’s growth is driven by interprovincial migration, students, and remote workers. HRM bylaws allow secondary and backyard suites broadly, and Nova Scotia released a Secondary Suite Incentive Guide in 2025.
- ROI angle: Higher average rents and strong demand year-round = excellent income stability.
Financing a Basement Renovation
- HELOC (Home Equity Line of Credit): Flexible option using existing equity.
- Refinancing: Unlock value increases to cover reno costs.
- Purchase + Improvement Mortgage: Programs like CMHC’s Purchase Plus Improvements allow roll-in funding.
- Personal loan/LOC: Works for smaller cosmetic upgrades.
Tips for Maximizing ROI
- Go legal: Ensure fire separation, egress windows, and parking compliance.
- Durability: Pick finishes that withstand turnover.
- Market smart: Highlight private entrances, in-suite laundry, or all-inclusive utilities.
- Efficiency: Energy-smart suites attract tenants and lower bills.
Bottom Line
If you’re a first-time landlord or seasoned investor, Edmonton, Calgary, Hamilton, Winnipeg, and Halifax stand out for basement apartment ROI in 2025. With the right financing and a proper legal conversion, these markets offer a balance of affordable entry, high demand, and strong rent-to-price ratios.
References
Calgary Real Estate Board. (2025). Monthly housing statistics – July 2025. CREB. https://www.creb.com/
City of Calgary. (2025). Secondary suites and incentive program. The City of Calgary. https://www.calgary.ca/planning/secondary-suites.html
City of Edmonton. (2024). Residential and secondary suites information. City of Edmonton. https://www.edmonton.ca/residential_suites
City of Hamilton. (2025). Additional dwelling units. City of Hamilton. https://www.hamilton.ca/build-invest-grow/planning-development/additional-dwelling-units
City of Winnipeg. (2025). Secondary suites bylaw. City of Winnipeg. https://winnipeg.ca/ppd/Zoning/secondarysuites.stm
Government of Alberta. (2025). Information for tenants – Rent increase rules. Government of Alberta. https://www.alberta.ca/information-for-tenants.aspx
Realtors Association of Edmonton. (2025). Market stats – July 2025. REALTORS® Association of Edmonton. https://realtorsofedmonton.com/
WOWA. (2025a). Hamilton housing market report – July 2025. WOWA. https://wowa.ca/hamilton-housing-market
WOWA. (2025b). Halifax housing market report – July 2025. WOWA. https://wowa.ca/halifax-housing-market
Zumper. (2025a). Edmonton rent report – August 2025. Zumper. https://www.zumper.com/rent-research/edmonton-ab
Zumper. (2025b). Calgary rent report – August 2025. Zumper. https://www.zumper.com/rent-research/calgary-ab
Zumper. (2025c). Hamilton rent report – August 2025. Zumper. https://www.zumper.com/rent-research/hamilton-on
Zumper. (2025d). Winnipeg rent report – August 2025. Zumper. https://www.zumper.com/rent-research/winnipeg-mb
Zumper. (2025e). Halifax rent report – August 2025. Zumper. https://www.zumper.com/rent-research/halifax-ns
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