This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
At Elevate, we’ve just wrapped up two backyard builds in Toronto—a garden suite and a laneway suite—at the end of 2024. These projects weren’t easy, but the results speak for themselves.
In this post, we’re laying out the hard lessons learned and giving you the real numbers. Let’s get started!
Nick’s Garden Suite Build
Nick’s Garden Suite in Toronto’s East End is a two-bedroom, two-bath build loaded with high-end features—heated floors, heat pumps for AC, and oversized windows for natural light. The project took six months after permits were in hand. Framing was quick, but finishing? Not so much.
The lot threw some curveballs: tight side setbacks and a neighbour’s massive oak tree. We used helical piles for the foundation—easier than trenching but pricier.
Key Takeaways:
- Budget like a pro: A garden suite can cost around $250/sq ft if self-managed – just for hard costs. Nick’s project came in at $325/sq ft because of the premium features.
- Check feasibility at the start: Garden suites come with strict zoning rules. A 1-meter setback from neighbours is a must, and sometimes you need to get a lawyer’s letter or your neighbour’s permission to get this done.
Christine’s Laneway Suite Build
Christine’s Laneway Suite proves that even small spaces can bring in big rent. This three-bedroom, two-bath gem has a spacious living area and a modern kitchen perfect for tenants.
The biggest hurdle? Managing a crew of contractors and dealing with the longer wait times. Christine’s pro tip? Document everything—photos and videos during construction are a lifesaver.
Key Takeaways:
- Timing is everything: Know your material lead times and contractor schedules. Lumber and supply lead times can throw off your timelines.
- Document it all: Photos and videos during construction can prevent costly mistakes or clarify things that might have been missed, especially when inspections or last-minute issues pop up.

Breaking Down the Key Differences: Garden vs. Laneway Suites
So, what’s the real difference, and which one should you consider for your own investment?
Laneway Suites: Laneway suites can only be built on properties that have a laneway, which is more common in certain parts of Toronto. Since fire access is more flexible, laneway homes can be larger, and in some cases, they allow for building right up to the lot lines. However, only around 36,000 properties in Toronto qualify for laneway suites, and they tend to be in more expensive areas closer to the downtown core.
Garden Suites: Garden suites, on the other hand, have more restrictions. They must meet a 45-degree angular plane starting at four metres above ground, which can shrink the buildable area. However, recent changes to zoning regulations have loosened some of these restrictions, especially if you’re only adding three units to your property. But, if you have more than three units, Toronto is still enforcing the stricter rules.
The reality is, we’ll likely see more garden suites built in the future. They can be placed on almost any backyard lot in Toronto, especially in more suburban areas. Laneway suites will remain less common due to their stricter location requirements.



The Costs and Returns: Garden vs. Laneway Suites
If you buy a starter 2-unit house in Toronto for around $1 million, you could earn roughly $600/month in positive cash flow with a 4-bedroom upper unit and basement rental.
Now, if you add a 1,000-square-foot backyard house for about $400,000, you could increase rents by an additional $3,200/month. This type of value-add project can significantly boost your cash flow, even with higher operating expenses.
Here’s the exciting part: With construction rates coming down, borrowing for these backyard builds is becoming more affordable, leading to even better returns. While it’s possible to value these backyard houses at close to $1M after they’re built, it’s typically safer to be more conservative and expect a refinance closer to 20% above the rental-grade build costs.
One more note – building a garden or laneway suite is not a “set it and forget it” project. Successful execution comes down to handling zoning, design, budget, and timelines. Missteps in any of these areas can eat into your returns quickly. This is why it’s essential to work with a reliable team that understands the ins and outs of these types of builds.
How We Can Help
If you’re considering buying an investment property with a backyard suite project, whether it’s a garden or laneway suite, we can help.
We take the time to understand your investment goals, help you find great opportunities based on data, and connect you with trusted contractors to manage your project. Plus, once your build is completed, we offer leasing and property management services.
Are you ready to turn your backyard into cash flow? Book a call with us, and let’s make it happen!
Here’s what it’s like to start as a client with us:
- Initial Consultation: We’ll talk with you to understand your needs and teach you how to invest wisely in Toronto real estate.
- Market Search & Purchase: We’ll search the market to find the perfect property for you.
- Renovation Support: If the property needs renovations, our trusted contractors are ready to help, and we’ll coach you as you manage the project.
- Leasing and Management: If you need help renting out and managing your property, our leasing and management team is here for you.
Ready to get started? Click on the link below, and let’s start working together!

What Toronto Real Estate Investment Is Right For You?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!