4 Once they’re in, it’s hard to get tenants out.
Rules vary across the country, but all renters are protected by provincial legislation and governing bodies, and the requirements for eviction are high for good reason: No one should feel their home could easily be taken away. As a landlord, you should be knowledgeable of the Residential Tenancies Act
Tenants can leave before a lease is up (usually by giving one month notice), so you want to ask questions to determine that they’re staying a while. Why? The longer you keep a tenant, the cheaper it is for you in the long run: when tenants move out, you need to show the space, get repairs done and wait for the next appropriate candidate. This can take weeks during which you won’t be collecting rent.
Remember, too, that you can’t protect yourself from all risk. You can—and should—ask for first and last month’s rent when your tenants move in, but a security deposit to cover holes in walls, broken appliances or ruined hardwood, is not allowed in some provinces. Familiarize yourself with the rules in your area or you could unwittingly break the law.
You should also know that not all clauses in a lease are binding. For example, if you write into the document that there are to be no pets or children in your building, and your tenant agrees by signing, but later gets a four-legged companion or a bundle of joy anyway, you can’t evict them.
5 Showing your space and finding the right tenants is tough work.
If you decide to become a landlord, be prepared to do some rigorous investigating on your own – and, since time is money, you should factor that legwork into your balance sheet. In your search for a tenant, you will need to screen all the inquiries about your apartment and the applications which means credit checks, getting an employment letter and contacting prior landlords to see if there is a history of NSF cheques, too.
6. A rental unit won’t necessarily add to the value of your home.
Some home renovations are almost always worth the investment, a rental suite is not necessarily one of them. If you do construction without permits, future owners of your home will have to contend with that. If they can’t rent the space out, or don’t want the risk since it’s not legal, they’ll have an extra kitchen that’s of no use to them and space that’s probably not easily integrated into a single-family home. They might use that as a negotiating tool to get your asking price down.
7 Landlords should be handy.
You don’t need to be able to re-wire your home, but if you can’t deal with a blown fuse or a clogged toilet, if standing on a ladder or bending under a sink freaks you out, you could have problems. Here’s why: if tenants confront even a small a problem (a leaky faucet, say, or a light that won’t go on), they don’t have to solve it, they just have to call the landlord. If you can’t handle the work yourself, you need to find someone who can. Before there’s a problem, ideally before your apartment is rented, interview contractors who will take on small jobs (they’re tough to find). Explain that you’ll have tenants and the potential problems that could arise based on the condition of your home—plumbing issues, electrical shorts, aging radiators—and that you’re looking for someone who could do that work quickly if needed. Keep their numbers on hand and don’t make tenants wait long after making a complaint to fix problems. But the more you learn to do yourself, the more money you’ll keep for yourself. If you’re buying new appliances, pay for the extended warranties. It’s one thing to manage your own space and problems, but add someone else’s washing machine to the mix and it can get to be too much. Extended warranties, besides being a tax write-off against rental income, mean fewer headaches for you.