Quick Answer
A Suite 26 (Allenby) garden suite in Barrie costs about $162,869 all-in and rents for about $1,586/month. Fully financed at 4.5%, it clears roughly $676/month interest-only, or $382/month with a 25-year mortgage payment.
The Short Answer
A one-bedroom garden suite rented at the local average usually pays for its own financing, with a few hundred dollars a month left over. The smaller studios and flats are much tighter. We ran all 7 models at CMHC average rent, with a full 25-year mortgage payment, across every Ontario market where CMHC publishes a figure for that size of suite. The one-bedroom suites covered their costs in 56 of 64 cases, across 32 markets. The studios and flats covered them in only 83 of 120, across the 24 markets with a published studio average, and ran short mainly in lower-rent markets such as Sudbury, Windsor, Sault Ste. Marie and Thunder Bay.
That test is deliberately conservative. CMHC's average covers every occupied apartment, including tenants who have been in place for years, so a newly built suite usually rents for more. It is a steady income property, not a get-rich scheme: the return comes from rent covering the loan, and from the loan slowly turning into equity.
Every number on this page comes from the same engine and assumptions as our rental income calculator. Use the calculator to swap in your own city, price, rate and rent.
A Worked Example: Suite 26 (Allenby) in Barrie
The example uses our least expensive one-bedroom garden suite, the Suite 26 (Allenby) at 423 sq ft, on a lot you already own. It is rented in Barrie, a mid-priced Ontario market. Toronto would flatter the numbers and Northern Ontario would understate them.
What It Costs
| Item | Cost |
|---|---|
| The suite: Suite 26 (Allenby) | $119,369 |
| Site preparation and foundation | $15,000 |
| Delivery and set | $8,000 |
| Water, sewer and hydro hookups | $12,000 |
| Building permit | $3,500 |
| Contingency | $5,000 |
| Development charges | $0 |
| Total project cost | $162,869 |
Site costs vary more than anything else on this list. A flat, serviced lot with short utility runs comes in under these figures; a long sewer lateral, rock, or a well and septic system comes in over them. The unit price is our current price, and the site lines are the calculator's typical Ontario figures, not a quote for your lot.
HST is not in that total. At 13% on the build it adds about $20,718. It is payable when you build and is not financed in the numbers below. Whether any of it comes back depends on your situation. How the HST rebates apply to modular homes →
Development charges are shown as nil because Ontario's Development Charges Act exempts one unit in a separate backyard building, on a serviced lot or a rural one, as long as the house has no more than two units and no other building on the lot has one. Some municipalities still publish rules written before the Act was amended in 2023, so confirm with yours before you budget.
What It Earns
| Monthly | Amount |
|---|---|
| Rent (CMHC average one-bedroom, Barrie) | $1,586 |
| Vacancy allowance (5%) | −$79 |
| Property tax on the new structure | −$68 |
| Insurance | −$50 |
| Maintenance reserve | −$102 |
| Interest (100% financed at 4.5%) | −$611 |
| Monthly cash flow, interest only | $676 |
With a full 25-year mortgage payment of $905 instead of interest only, monthly cash flow is $382. The difference, about $295 a month to start, is not a cost. It is loan principal paid down, which becomes equity in the suite.
The rent at which this suite exactly covers its costs is about $874/month interest-only, or $1,184/month with the mortgage payment. That is well below the local average, so there is room for a softer market.
Every Model, Same Assumptions
| Model | Layout | Sq ft | Total project cost | Rent (Barrie CMHC) | Cash flow, interest only | Cash flow, 25-yr mortgage |
|---|---|---|---|---|---|---|
| Studio 26 (Apsley) | Studio | 282 | $139,744 | $1,111 | $336 | $83 |
| Studio 26 (Arden) | Studio | 320 | $147,244 | $1,111 | $300 | $34 |
| Studio 26 (Ayr) | Studio | 310 | $155,744 | $1,111 | $259 | -$22 |
| Flat 26 (Almonte) | Flat | 296 | $144,744 | $1,111 | $312 | $50 |
| Flat 26 (Alton) | Flat | 310 | $163,494 | $1,111 | $222 | -$74 |
| Suite 26 (Allenby) | Suite | 423 | $162,869 | $1,586 | $676 | $382 |
| Suite 26 (Ancaster) | Suite | 395 | $172,994 | $1,586 | $628 | $315 |
Studios and open-plan flats are priced against the CMHC bachelor rent, and the one-bedroom suites against the one-bedroom rent. CMHC's average includes long-standing tenancies, so a brand-new, self-contained suite often rents above it. The table does not assume that premium. Check current listings near you before you set a rent.
What Moves the Number
Your interest rate. It is the single most sensitive input. For the Suite 26 (Allenby):
| Rate | Cash flow, interest only | Cash flow, 25-yr mortgage |
|---|---|---|
| 3.5% | $812 | $472 |
| 4.5% | $676 | $382 |
| 5.5% | $541 | $287 |
How you pay for it. The example assumes the whole project is financed, typically by refinancing or borrowing against the main house. Paying cash removes the interest line entirely but ties up the capital. Financing a modular home in Ontario →
A municipal grant. Some municipalities fund a suite that is rented at an affordable level for a set number of years. A grant lowers what you borrow, but it caps the rent, so run both versions before you apply. The Ontario ADU grants directory →
What This Leaves Out
These are monthly, pre-tax figures, and deliberately so. They do not include:
- Income tax. Rental income is taxable; interest and operating costs are deductible. The net effect depends on your bracket.
- Appreciation. A suite usually adds to the property's value, but we do not count on it.
- Property management and owner-paid utilities. Most owners of one backyard suite manage it themselves, and the suite is normally metered separately.
- HST, as noted above.
Before You Commit
- Check what your lot allows. Size, setbacks and servicing are set by your municipality's by-law. Check your address →
- Know your obligations as a landlord. A self-contained suite is covered by the Residential Tenancies Act. Renting out a garden suite in Ontario →
- Run your own numbers. The rental income calculator takes your city, model, rate and rent.
Frequently Asked Questions
Is a garden suite a good investment in Ontario?
In most Ontario markets, a factory-built garden suite rented at the local average rent covers its own financing with money left over. The smaller studios and flats are much tighter and can run short in lower-rent markets. In the Barrie example, a Suite 26 (Allenby) costs about $162,869 all-in, rents for about $1,586/month, and clears roughly $382/month after a full 25-year mortgage payment at 4.5%, before income tax.
How much does it cost to build a modular garden suite in Ontario?
Our garden suites start at $96,244. With typical site preparation, delivery, hookups, permit and a contingency, a complete project runs from about $139,744 to $172,994 before HST, depending on the model and your lot.
How much rent can a garden suite earn in Ontario?
It depends on the market. Using CMHC average rents, a one-bedroom rents for about $1,586/month in Barrie and about $1,763/month in Toronto. A new, self-contained suite often rents above the average.
Do garden suites pay development charges in Ontario?
Generally no. Ontario's Development Charges Act exempts one garden suite in a separate backyard building, on a serviced lot or a rural one, as long as the house has no more than two units. Confirm with your municipality before you budget.
What is an ARU in Ontario?
ARU stands for Additional Residential Unit, the term Ontario by-laws use for a second or third home on a residential lot. A garden suite (a detached ARU in the backyard), a laneway suite, and a basement apartment are all ARUs.