One thing can pose a problem, however, according to mortgage broker Anthony Lococo. “[W]hether or not the second unit is permitted. Just because it produces income doesn’t mean it’s considered a “unit”. Granny flats are a good example…”

Most real estate agents can tell you how hard it is to tell a house with an unpermitted granny flat. Financing can be even more difficult. If the property is not an actual duplex, just a single family house with a large wall partitioning areas and two separate kitchens, lenders may not be able to consider the potential rental income in your qualifying ratios, even if you can, in fact, rent it out.