If you have friends or family that are landlords, you’ve probably heard a few horror stories about nightmare tenants. Being a landlord is not “easy money” – unless you work with a quality property management company, of course. If you’re on your own, you have to do a bit of groundwork beforehand to make sure you aren’t setting yourself up for a headache. We have compiled five lessons that every first-time landlord should know before beginning.
Every province has their own different residential tenancy act and rules can vary dramatically from province to province even for provisions and clauses that you might consider “common sense.” You need to be well informed of all the rules before signing your first rental agreement. For example, you can’t have a “no pet” provision in the province of Ontario, unless the pet causes problems for those around it (like allergic reactions). You can read the Residential Tenancies Act on the Government of Ontario’s website.
As a landlord, it’s your responsibility to make sure your rental suite complies with all of the local bylaws. The unit must have properly working smoke detectors and a useable escape route, for example. You will be able to purchase insurance for your unit if all of the municipal bylaws are met.
You need to be very selective about who you are going to accept as a tenant. The first step is to have them fill out an application form, which you can download from your province’s website. You should follow up with previous landlords they mark down in the reference section. This simple question for previous landlords will go a long way: “If you were to do it over again, would you have rented to these people?” You should be able to get an honest response from that. The next step is to verify employment and income level and do a credit check, because even if they were dream tenants before, they still need to be able to pay rent on time.
You should notify your insurance company in writing that you have a rental unit. If you go on vacation and you come back and your basement is flooded because of your tenant, your insurance company will not cover the damages if you did not notify them in advance about your rental unit. They will tell you that they charged a premium based on the risk assessment of one family living in the property. If you renovate your home to add an income suite, you will need to adjust your home insurance policy accordingly.
To be sure that all your bases are covered, you should hire a property management company like Medallion Capital Group. We will take care of everything from making sure your rental unit is in good condition, to finding a great, reliable tenant. This way you can sit back and reap the benefits of being a landlord with none of the headaches and frustrations.