Becoming a landlord can be a great way to make additional income. While there are some risks involved such as nightmare tenants and surprise expenses, it can also be highly rewarding. To help you get off to the right start, we’ve compiled our top five tips to prepare you for your new investment.
This is probably the most important step, so we’ll start here. When it comes to screening applicants to find the perfect tenant, it’s best to take your time. Make sure you do research beyond face-value. This will reduce the risk of neglect to your property, unpaid rent and nuisance complaints from neighbours.
Check credit history, ask for income and employment status. It’s also a good idea to contact previous landlords for references. Be aware of what you can and cannot ask, though – for example, it would infringe on tenants’ privacy to ask about marital status, sexual preference, or if they plan to have (more) children.
Becoming a first–time landlord doesn’t need to be an overwhelming experience – there’s advice and guidance available that can help you learn the ropes.
Join a landlords association. These communities are often run by veteran landlords to provide valuable advice, education and the opportunity to network with other landlords. Check online to find a landlords association in your area.
Hire a property manager. They can assist you with anything from finding a model tenant to responding to tenants’ repair requests.
As a general guideline, you must provide a safe and livable environment for your tenants, in compliance with the law. Examples from the Canadian Mortgage and Housing Corporation (CMHC) include:
- You’ll uphold the home in a good state of repair.
- You won’t limit the supply of electricity, hot/cold water or any other utilities.
- You can’t seize the tenant’s property for any reason (like unpaid rent).
- You can’t interfere with the “reasonable enjoyment” of the tenant, or their guests within the property.
Every province has different legal requirements for landlords - for example in Ontario, a landlord legally can’t take a deposit for anything other than rent (like a security deposit). Meanwhile in Quebec, you would not be able to request a deposit at all. Be sure to check up on
Remember, your property is an investment – just don’t spend money on renovations that won’t produce a higher rent or will need a lot of maintenance. Make your property durable enough to sustain wear and tear without the need to replace or repair frequently. Also, learn how to make your home look great without spending a lot of money.
Some recommendations would be:
- Laminate flooring – easy to clean.
- Neutral paint colours – fits with the common preferences.
- Replace bathroom faucets, shower heads and kitchen surfaces to give a modern facelift.
Even after doing everything you can to make your first landlord experience safe, secure and happy there are still things that can happen beyond your control. Without the right insurance, events such as fire, theft and water damage can be catastrophic to your investment.
Protect yourself and your property by getting a
Protect your new investment with landlord insurance from Sonnet.