Renting out your property can be a great source of income, but you should make sure you’re prepared to take on such a responsibility. Here are some basic tips on renting your home, as well as some excellent resources to help get you started, including all the forms you’re going to need.
Get references. This might seem like a no-brainer, but you should take it a step further than just calling the current landlord of the potential tenant. Ask the potential tenant for the contact information for a few past landlords. The current landlord may be itching to get their tenant out so their “recommendation” could be dishonest. If you check with previous landlords, you could get a more honest opinion.
Make sure you’re ready. Renting your home isn’t as simple as collecting a cheque at the end of the month. You, as the landlord, will have several responsibilities including safety and repair maintenance and upkeep of the home. To learn more, click here.
Increase the rent for pet owners. Even if the potential tenant promises their cat or dog is well behaved, you shouldn’t take their word for it, or you could be the one who pays for it later. Even well trained pets can track mud in the house, stain carpets, have accidents, scratch the floors with their claws … you get the picture. If you’re not completely opposed to the idea of allowing pets, you should consider increasing the monthly rent by $25 or so, to help compensate for any clean-up or repairs you may need to make when the tenant moves out.
Do a walk-through. Make sure you do a walk-through with the new tenant before they move in, and document the condition of the home (link to printable form below). You can also consider taking photos of the place to further protect yourself.
Make sure you have the proper insurance. It’s extremely important that you check with your insurance provider before you rent your home to make sure you have proper coverage. Don’t assume your current policy will cover your home once you are renting it out. Should your tenant accidently burn it to the ground, it could be a very costly mistake.
Don’t forget the paperwork. There are several forms that should be filled in to help protect yourself and the tenant. Some of which include (clicking on the name will open the PDF copy of the form in a new window so you can print it):
Security Deposit Remittance Form – If you’re collecting a security deposit from your tenant, you must complete this form and hand it in, along with the security deposit, to the Office of the Rentalsman within 15 days of receiving it from your tenant. The amount of the security deposit cannot exceed the equivalent to one month’s rent. As the landlord, you have 7 days after the tenant moves out to make a claim to the Office of the Rentalsman to redeem any of the deposit, whether it’s for rent owing, damage, etc. The deposit will be given back to the tenant if you fail to make a claim. For more information on security deposits, read this form.
Make regular inspections. For long term rentals, make sure you do annual inspections to ensure the tenant isn’t causing any damage. You could find yourself with a nasty surprise when the tenant moves out if you don’t make an inspection on a regular basis. You must give your tenant notice before entering the premises though, and the length of notice depends on why you’re entering the premises. Click here to learn more.
Keep it professional. If you get too buddy-buddy with your tenants, it’s going to be difficult to deal with them if they break part of the rental agreement (for example, smoking in the house or getting a cat).
Consider hiring a property manager. If you want to rent your home but don’t feel you’re up to all the responsibilities attached to being a landlord, you could consider hiring a property manager. Hiring a property manager is also a good idea if the home you’re renting is in a different town, province, or country than where you live.
Two resources that should answer any questions you have and that offer additional tips on renting your home are:
CMHC (Canadian Home and Mortgage Corporation)
A big thank you goes out to Moe Martell of GreenLight Property Management, Inc. for allowing me to pick his brain in order to provide up-to-date information and accuracy when writing this post.
What tips do you have?
Do you have any great tips on renting your home? Are you a home owner with some tenant horror stories? Leave a comment so others can learn from your mistakes!