Buying a home can be an exciting time. But what if you’re not planning on actually LIVING in the home? Purchasing an investment property can be a lucrative business if you’re educated on the Pros & Cons of being a landlord.
Here are some things to consider if you’re thinking about purchasing a property with the intention of renting it to tenants:
Screen your applicants.
This is an obvious point, but it’s an important one. Screening your potential tenants will save you time and money in the long run, so don’t skip this step! Your applicant may tell you they have a great history with rentals and a perfect credit score, but do your due diligence!
Asking for proof of income, their employment status AND a credit check will help you determine if this tenant is likely to pay their rent in full, on time. It’s also a great idea to ask for references from past landlords, and even employers to get a feel for what they’re really like.
Understand what you’re required to provide.
As a landlord, you are legally responsible for the property and are required to provide certain things for your tenants. The Canadian Mortgage and Housing Corporation (CMHC) lists the following as examples:
– you agree to keep the home in a state of good repair
– you agree not to limit the supply of utilities for your tenants (electricity, heat, hot/cold water etc.)
– you agree you cannot seize the tenant’s property for any reason (like if they didn’t pay their rent)
You can find out more about the rights and responsibilities of being a landlord on the CMHC website HERE.
Think about the durability of the finishes in the home.
Any renovations you do to the home should consider how well the floors, cabinets, counters and more will withstand the daily grind of another person living there. Marble counters may look beautiful but may not withstand the lifestyle of some tenants.
Things like laminate floors (as opposed to hardwood or carpet) will be easy to maintain and won’t need a lot of repairs down the road. Neutral paint colours will blend well with more people’s furnishings and attract more tenants. Think clean, easy and less is more.
Get your Realtor to help!
As your Realtor, I can help guide you in the right direction! We frequently help new landlords and possible tenants connect so the getting the home leased is easier. Let us help market your home, make sure the lease contract protects everyone involved, and get that new landlord/tenant relationship booming!