Rental properties can be an exceptional source of income, providing a continual revenue stream that can help pay the mortgage or allow you to expand your investment properties. However, anyone thinking of becoming a landlord should be aware that it is not a passive income. Even if you are just renting your basement suite, you are in business and you should understand what it is all about.
Being a landlord is a full-time responsibility. There will be maintenance requests at inconvenient times, the tenants may miss out on rental payments or they can be too troublesome, but you may not be able to evict them straightaway. If you have an apartment for rent, it is important to do your groundwork before you become a landlord. Here are some tips for first-time landlords:
1. Know The Laws
Before you put up the “Apartment for rent” board, educate yourself on the residential tenancy act in your province. You may want to consult a lawyer or at least take time to read up. Go through the basics both from the tenants’ and landlords’ perspective. Each province has a website that outlines these laws and all the information you need is available at the click of a button.
Some common challenges that landlords face are non-payment or delayed payment of apartment rental, damage to apartment rental caused by tenants and disruptive tenants. Ensure that you are fully educated on the rules and regulations pertaining to these challenges. For example, in Ontario, you may not be able to evict a tenant just because they have bought in a pet. You cannot have a no-pet clause either. So, it’s better to be aware of these laws beforehand. You should also research your local municipal bylaws. These may include things like standards and the guidelines for fire and the building safety.
2. Bylaws About Basement Suites
If you are looking to rent a basement suite, note that in many cities in Canada, it's illegal to rent a basement suite. Despite this, many landlords rent their basement knowing or unknowing without any problems, however be aware that if your suite is illegal you could be shut down and also have to pay penalties. In major Alberta cities such as Calgary and Edmonton, you may be able to rent your basement suite if you have permit from the city or by applying for one. Since provinces also have different rules when it comes to rentals, so make sure to be familiar with laws in yours own province.
3. Screen Prospective Renters Carefully
Be selective about who you are going to have as a tenant. Make sure you know who you are renting to and that they can afford to pay the rent. The person may make a great first impression and you may be tempted to skip the background check, but never omit this crucial skip. Get them to fill out the tenant application form, get references from the previous landlords and do credit checks.
Some time it could be hard for new landlords to understand the credit scores and what they represent. The simple rule of thumb is to avoid tenants with score of less than 600 as it represent weak or bad credit. ideally you should take tenants with credit score between 700 and above seriously when you are doing credit checks for your house for rent. To know these scores and what they mean better, here is some more details;
5. Treat Your Tenants Fairly
Your apartment or the house for rent is probably your the most valuable asset. You worked hard to buy the rental house or the
apartment and it is not unfair that you want your tenants to treat your property with the same respect. It’s important though to
start the landlord-tenant relationship off on the right foot thinking the long term benefits. It is true that any landlord and tenant
relationship is very delicate and uneasy and even the most desirable tenants would get on your nerves sometime but it’s
important to pick your battles. It’s a good idea to leave your tenants alone and only bother them when it’s absolutely
necessary e.g. when they are consistently noisy, disrespectful of the property or late on payments just a few example.
5. Inform Your Home Insurance Company
When you decide to rent out a portion of your home, you should inform your home insurance company. Surprisingly, a vast majority of people don’t do this. Insurance companies charge you a premium based on the risk assessment of a single-family home. However, renting out a portion increases this risk and the insurance company may refuse to pay anything in case of an eventuality such as fire.
6. Sign A Written Lease
Documents such as the move-in inspection form, the rental application form and the residential tenancy agreement are essential if you want to avoid any trouble in the future. Even if you are renting your home to a family member or close friend, have a properly written lease in place. The lease between you and your tenant should clearly outline the rules, expectations, length of the lease term and late rent penalties.
To summarize, becoming a successful landlord can be ridden with challenges. However, with the right professional help, you can get high-quality tenants and enjoy a high rate of return on your rental property. Get in touch with us today to begin your journey as a landlord.
Are you a landlord with an apartment for rent in Calgary, Edmonton or anywhere in Alberta but can’t find the right tenants or get the right rent for your apartment for rent? Or you are a renter whose apartment search in Calgary or Edmonton seems like an unending task? Signup with RentWell.ca to put an end to all your rental woes! Try it free!