This is a guest post by Clare.
With roller coaster housing prices and more people finding that renting is better idea than buying, there will be more people turning to renting. You may be interested in becoming a landlord for that passive income experience.
As a beginner landlord, I’ve learned a few things along the way that I wish I had known when I first started. Here are some things you might find useful as you begin on your landlord journey.
Know your Tenants Rights
In order to know how to work with your tenants (in case you get a tenant from hell) you need to know what they can or cannot do, demand from you, or not do. You need to know their rights.
Here are some of the documents or websites that tenants across Canada from West to East (minus the territories):
Tenant Resource and Advocacy Centre– has a phone line your tenants can call in addition to a handy Tenant Resource and Advocacy Centre Survival Guide. If you live in B.C. I highly recommend you download this guide. It’s one of the most downloaded publications from the government of British Columbia (who knew?). I downloaded this guide recently and found it very helpful.
In Alberta, the Landlords and Tenants webpage has a myriad of links including how to file a dispute, tipsheets on the rights and responsibilities of landlords and tenants, and Alberta also has a guide for download.
In Sasketchewan, the Landlords and Tenants website has information on starting a tenancy, ending a tenancy, and what to do after a tenancy is over (like how tenants get their security deposit back)
In Manitoba, you can read the Residential Tenancy Act and also contact the Residential Tenancy Branch. They offer presentations on landlord and tenant issues to schools and other community groups. They also help mediate disputes between landlords and tenants.
Ontario’s residential tenancy branch probably has one of the most comprehensive websites. Not only do they have a guide (and multiple brochures you can download), they have a chart where you can find your issue and find out what you can do about it.
Quebec has a website through the CMHC as well. Apparently in Quebec, collecting deposits is not allowed? (oh geez!)
The website is through CMHC in addition to information for tenants through the office of the Rentalsman
In Nova Scotia, has a tenant guide with the first part of the guide named “Tenant Empowerment: How to Use this Guide.” So you know that they mean business.
Newfoundland and Labrador
Last but certainly not least, the Service NL website for landlords and tenants is chock full of good information (written in a no nonsense and easy to find way) for both the tenants and the landlord.
Get Thicker Skin
I tend to be the “aim to please” type, so as a landlord it has been difficult for me to not to try and be my tenants friends. It’s a good idea to keep the relationship professional and cordial otherwise they may try and take advantage of your kindness.
My first basement suite tenants broke the lease agreement about 10 months into the contract. Either they didn’t read the contract or they somehow thought that a lease meant “month to month”. They broke the lease and somehow I ended up finding the new tenants and the only “penalty”was getting money back for advertising ($21) and from the damage deposit, a scratched wall from parts of a metal bed frame I gave them ($5). Technically they were supposed to find people to sublet until their lease agreement ended and they were supposed to do the work.
I learned that as a landlord, you need to grow a pair or else people may decide they can walk all over you.
Know How Much Rents Go For
Knowing how much rents go for in the area is extremely important. You want to set your rental rates within market value for the area. You don’t want to go so low that you low ball everyone else in the neighbourhood, and you don’t want it too high as the demand will likely be lower.
Each province should have information on how much you can legally raise the rent and this varies from province to province. This raise accounts for the inflation due to rising utility prices, rising property taxes, and the like.
Don’t Stop Until You Get the Security Deposit and Lease Signed
Finally, another important piece of advice is to keep the rental unit on the market until you get the security deposit and the lease signed. There are, unfortunately, some very flakey people out there. To the point that they say yes, they meet you, say yes again. Then they try and make you reword the lease agreement so that they could leave and break the contract without penalty (e.g. instead of a 12 month lease they want to leave at 6 months).
There are obviously many other things to consider and research before jumping into the deep end of becoming a landlord, and this is just a fraction of what you would need to know.
Landlords and landlordesses out there, what have you learned through your experiences?
About the Author: Clare is a 20-something who lives in beautiful (but expensive) British Columbia and has been working on her frugal living skills and fighting lifestyle inflation. She works to expand her DIY investment knowledge and hopes to enjoy financial independence one day. She enjoys reading personal finance books, freelance writing, but not so much arithmetic.