Deciding to rent out a property is a big decision. For many, this can seem like an easy way to make some extra cash, but it can actually require a lot of work. Not only do you require the right knowledge, but you should also have the money to spend on making your property a sound investment.
If you are unsure what you should be considering before finalizing your decision, then you are in luck. This post asks four key questions related to renting out a property to ensure you are making the right choice.
Do You Have The Finances?
One of the first aspects to think about before renting out a property is your finances. This is crucial to ensure you can meet your financial obligations, both in terms of the property itself and your personal expenses. Landlords have to think of mortgage payments, property maintenance, tax implications, and more.
To do this, you need to have a good understanding of your expenses, income, and any possible liabilities. Firstly, you should calculate your expected rental income by looking at current market rates for similar properties in your area. You must then ensure your rental income can cover landlords’ insurance, mortgage payments, property taxes, and so on.
If you are aware of your finances prior to becoming a landlord, you can minimize the risk of falling into debt and have peace of mind in your decision.
What Are Your Province’s Rental Rules?
Next, you must understand provincial rental laws. These laws, which can vary significantly depending on the province, dictate the rights and responsibilities of landlords and their tenants. If you are familiar with the province’s Residential Tenancies Act or similar legislation, then you can ensure you are operating legally and avoid potential problems.
There are numerous provincial resources that you can consult to check rental rules. You can find the website of your province’s Residential Tenancy Branch and review the relevant acts, guidelines, and regulations provided there. Alternatively, you might contact your provincial or territorial consumer affairs office to obtain information on landlord and tenant legislation.
Some of the key aspects to become familiar with include deposits, lease agreements, maintenance and repairs, and rent increases.
Can You Find Reliable Tenants?
No one wants to deal with a tenant who does not pay rent on time or damages the property. This is why you must guarantee that you can find reliable tenants before renting out your property. Finding a good tenant will help to avoid financial losses, damages to the property, and potential legal problems. The tenancy will run a lot smoother for both you and your tenant.
The tenant screening process should include background checks, reference checks, and income verification. This can be a time-consuming task, but it is essential to complete. Some landlords will seek out help from rental management companies during this step. For example, professional condo rental management by Del uses detailed screening to weed out bad tenants, who could hurt your bottom line, during this process.
Will You Be Hands-On When Managing Your Rental?
Finally, deciding whether you will be a hands-on landlord when managing your rental property is vital. This decision will directly impact your management style, potential costs, and responsibilities. It will affect how involved you are with tasks like legal compliance, property maintenance, and tenant communication.
A hands-on landlord should have the time to commit to daily tasks like coordinating repairs and responding to tenants. You will also need the skills to complete these jobs to a high standard. If you do not believe this is feasible, then you should consider partnering with a property manager, as previously discussed.
To conclude, there is a lot to think about when you are considering a career change, or career addition, as a landlord. This can be a costly and time-consuming role, but it can also be worthwhile if you have thought it through and are willing to dedicate yourself to succeeding.
