Owning rental property can be a rewarding experience but it can also be a big headache if you do it the wrong way. There is a lot more to being a landlord than just collecting a cheque every month. If you truly want to have the best experience possible owning rental property, then here are our top five tips for landlords:
- Know your rights and obligations and your tenant’s rights and obligations
When you enter into a landlord/tenant relationship, you are entering into a legal contract. You need to understand your own rights and obligations as well as your tenants. Before you begin renting out properties, review those rights and obligations which can be found in the Residential Tenancy Act (RTA). You can find this legislation along with other useful information on the Landlord Tenant Board website.
- Screen prospective tenants carefully
Having the right tenants makes all the difference when you own rental property. But to get the right tenants you need to screen your prospective ones. Start by having prospective tenants fill out a tenant application form. Do a credit check with TransUnion and Equifax and ask for references from previous landlords.
When you speak to previous landlords, ask them whether or not they would rent to your prospective tenant again. That is usually enough to get the ball rolling to find out all the information you need.
- Have a legal rental agreement – in writing!
Don’t be lazy about putting a written rental agreement in place. Having a written document will help you avoid all kinds of problems and misunderstandings. The rental agreement outlines the expectations between landlord and tenant including how much the rent is, when it is due, how much security deposit is needed etc.
And in the worst-case scenario – that you someday need to begin eviction proceedings – you’ll have a signed agreement that you can submit to support your case.
- Stay on top of maintenance issues
As a landlord, it is up to you to ensure that the property remains “in a good state of repair and fit for habitation”, as prescribed in the RTA. Not only is this your legal obligation, but it just makes good business sense as well. If you own multiple rental units, potential renters are likely to ask current renters about how well you handled repair and maintenance issue.
- Have proper insurance
Getting the proper insurance for a rental unit isn’t cheap but it is always necessary. You will need both liability and property insurance. It is vitally important that the insurance company knows they are insuring a rental unit regardless of whether it is a standalone unit or one inside your home. Otherwise, should there be a fire or some other issue that starts from within the rental unit, you could be out of luck when you go to make a claim.
Remember, being a landlord can be a great way to make a secondary – or even a primary – income, but you have to keep in mind that you are running a business that comes with risks and responsibilities. Keep the above tips in mind, and you will be off to a good start!