A free laneway house in a market where the benchmark price for a detached home is over $1.6 million is bound to come with a catch -- and it does.

A Vancouver entrepreneur is offering to build prefabricated laneway houses free of charge for homeowners with space in their backyards, as long as they let him collect rent from the tenants for 12 years.

“It's a crazy idea, but I think I can make it work,” Duane Laird told CTV Vancouver on Monday. “If I can get someone's backyard for 12 years, I can profitably build a laneway house, rent it out for 12 years, and then give it back to the person that owns the property.”

On his website, Laird outlines the steps a willing property owner would have to take. After the site is confirmed to be properly zoned, the two parties would draw up a contract and Laird would build the house.

Laird finds the tenants, collects rent, and maintains the area around the home. After 12 years, the house is inspected, painted, and handed over to the property owner in “as-new condition.” He even offers a buy-out option for those who can’t wait 12 years to take possession.

“If the owner says, ‘This is a lovely little house. I’d like to have it.’ There is a fixed price,” Laird said.

He estimates each 500-square-foot home will cost between $100,000 and $125,000 to build using modular prefabricated components, and be tenant-ready about four months after breaking ground.

Each unit is expected to put on the rental market for $1,200 to $1,500 per month.

Demand should be brisk given the city’s reputation for a low vacancy rate and sky-high rent. PadBlogger, which collects data on active listings throughout Canada, ranked Vancouver at the top of its latest most expensive markets list. May data from the website shows rent for a one-bedroom fell 0.5 per cent last month to $2,090, while rent for a two-bedroom increased 1.6 per cent to $3,250.

Vancouver realtor Aaron Jasper isn’t totally sold on the idea. He recommends property owners have the contract (https://www.freelanewayhomesvancouver.com/the-contract) closely examined by a lawyer before signing.

“I think the devil is in the details,” Jasper said. “Why would you have other people sharing your backyard, your garage, all that stuff, if you are not getting any of the benefit?”

Jasper estimated a laneway home can add as much as $500,000 to the value of a property.

He said a free one with such significant strings attached may not make sense for owners with the cash to build on their own, and start collecting rent on day one. He added that waiting 12 years for rent to start trickling won’t be a viable option for owners struggling to keep up with hefty mortgage payments.

Laird said he can put up the costs for the first three houses to get his venture started. After that, he said he plans to rely on investors to bankroll the project, since he cannot get a bank loan.

His idea is already sparking interest.

“I've had a couple of calls already this morning,” he said.

With report from CTV Vancouver’s Allison Hurst