Investment properties are real estate which is purchased for the purpose of generating financial returns. Whether you buy a large apartment building or rent out your basement, when you are renting to a tenant you become a landlord which means you are subjected to laws, responsibilities and regulations that differ between provinces. Below are ten tips for renting your investment property.
- Contact your local or municipal government to first determine if you are legally permitted to turn your home into an income property. Work with them to ensure the unit adheres to all existing building and fire codes.
- Get to know the landlord-tenant relationship regulations in your province.
- Inform your insurance company about your plans for renting out space in your home, and ask them if you require additional coverage.
- Get your home renter-ready. Whether it requires simple changes like a fresh coat of paint or major renovations, make your home look and feel as spacious, bright and comfortable as possible. Your home should look appealing inside and out in order to attract potential renters.
- Price and market your unit competitively. Scan the classifieds and visit rental websites to find out how much similar units are listed for. You can ask your Royal LePage real estate agent for pricing advice, and to help you find the right tenants through a listing.
- Conduct a screening process for applicants. Consider running a criminal background check, as well as a credit check, on prospective tenants.
- Draft a written tenancy agreement. It may contain information such as the date the tenant will move into the rental unit, the rent amount, the date rent is to be paid, what services are included in the rent (such as electricity or parking) and any separate charges, as well as the rules that you require the tenant to follow.
- Consult a lawyer to look over the contract. Although not necessary, a lawyer can ensure there are no legal problems or issues with the contract before you present it to your tenant.
- Request a minimum deposit in advance that may be used against any property damage or unpaid bills, depending on the laws in your province.
- Have the tenant sign the agreement, and provide him or her with copies.
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