It would be awesome to have an apartment on the side and to rent it out for some extra profit. However, if you don’t know what you’re doing you might end up losing more than you gain. Nightmare tenants, decrepit real estate or just plain bad luck can stress you out or cost you a pretty penny. In spite of this, being a landlord in Canada can be rewarding and great if you follow these simple rules.
1. Know what and where you rent
To be a good landlord in Canada (or anywhere else, for that matter) you have to know your market and your product. To put it more simply, you need to know anything and everything about the place you plan to rent. You should inspect every nook and cranny from the foundations to the rooftop and know at all times what condition your charter is.
Apart from this, you need to have a good idea of where you’re renting. Knowing your potential market can help you improve your chances of getting better tenants perfectly suited for your home. So, if you rent a single person apartment in a suburb full of families, you are probably not doing a good job. Likewise, if a family needs to hire one of the long distance moving companies in Ontario to reach your unit, they’ll probably opt for a different choice. Of course, you cannot completely redo your entire place. However, you can make small changes to improve your chances of finding a good tenant.
2. Every landlord in Canada should know the laws
Knowing the laws of the country you want to rent out an apartment in is essential for every landlord. In this case, you should know Canadian tenancy laws and regulations. Knowing the local and provincial laws is also crucial to every landlord in Canada. Laws are in place to protect both you and your tenants. But, you’ll want to know what you are required to provide and do in order to make a safe living environment. This way both sides are happy!
Check out Canadian laws
You can be a landlord in Canada even if you aren’t Canadian. You can call one of the international moving crews in Canada and check out your first property. Just make sure to look up the local and provincial laws to decide which region suits you the best.
3. Screen your potential tenants
Knowing your potential tenants is the key to having a good and successful business relationship with them. This is why you should get to know a lot of people before actually accepting them. A good idea is to put the word out to your reliable local movers Ontario to let people moving to the city about your place. Other ways of finding potential clients can be:
- Referrals from your friends and family (only the ones whose opinion you trust)
- Advertising (every landlord in Canada should advertise if their unit is empty)
- Word of mouth (always a good way to market your charter)
Hold interviews with every potential tenant. This will give you a good idea of who they are and how they’ll treat your unit. Also, meeting them in person humanizes your relationship. Now, they’ll take more care than if you were just some voice on the phone and a bank account.
4. Crunch the numbers
Every landlord in Canada should do their math. Put everything on paper and decide how much it’s worth to invest in the property you have. Make sure you overestimate your costs, this way there aren’t any nasty surprises later on. Also, plan your budget and see if there are any ways to cut other costs and invest more in some new real estate. Finally, get informed about taxes in your province and see what’s deductible.
5. Plan ahead
Every successful landlord plans ahead. Whether you want to invest in your current unit or acquire a new one, you need to consider future actions. Having real estate is usually a good thing but as the market changes you might find yourself with a worthless property. So, you should use the income from your rent to invest in something important. On the other hand, if you’re satisfied with renting out what you currently are, use your extra income to invest in the future. Pay for your children’s college or put your money in a bank. This way, whatever happens to the real estate market, you’ll still have some means stashed away for the future.
The landlord in Canada pro tip: Have an exit plan
When dealing with property and real estate you should always have an exit strategy! This is your worst case, cut-your-losses scenario, and you should prepare and plan it very carefully. We all want to think that our business ideas will succeed, but the reality is usually harsher than what we’d like. There are a number of factors that can skyrocket or crash an investment, and renting is no different. You can have the best idea and all the resources but you luck can turn for the worse and your plan will fall apart. As a result of this, your lovely unit can turn into a bottomless money pit. Because of this, you should always have an exit plan.
Follow the market and know when to back out if it seems like it’s going poorly. Also, think how much it’s actually worth to invest in the unit. Lastly, every landlord in Canada should save a certain number of rents and stash them away. This is in case you need to sell your charter and purchase a new and better one. Also, if some unexpected costs come up, you’ll be ready.