With record-low interests rate, the idea of owning rental real estate seems like a no-brainer. Buy a property in a favourable location, and rely on renters to pay your morgage. If you buy several properties, being a landlord can become your full-time job. Yet like any job, you need to research what it takes to be a landlord.
Each landlord should be familiar with their province's landlord and tenant's law. Realize that most tenancy's acts favour the tenant. That's why its important to find the right tenant to avoid all the headaches and stress of a tenant from hell. It's also important to have enough cash flow to cover your mortage if you have vacancies, special levies, or any necessary repairs.
Finding a Tenant
First set your rental price by reviewing the competition through Craiglist and newspaper ads. To make your Craiglist's ad stand-out from the crowd, make it readable by spacing short paragraphs. Jazz up the caption with adjectives, such as beautiful, quiet and spacious.
It’s also important to refresh your Craiglist's ad every couple of days by deleting it and positing it again. With this tip, your ad will remain at the top. And include good quality pictures with your ad. You have three chances to screen a prospective tenant: the phone-call interview, the in-person interview, and the background checks.
The Phone-call Interview
Have a list of prepared questions for your phone-call interview. These may include:
- How long have you lived in your current residence?
- Why do you want to move?
- How close is your workplace to this location?
- What do you do for work?
- How long is your desired tenancy, and why?
- How many people will be on the lease agreement?
- Will you need a space for your car, or storage for a bicycle?
- Do you have a pet?
And instead of asking whether or not they smoke, try this trick: mention that they can smoke. Based on your conversation, you will be able to determine if you would like to meet them in person.
Record the name, phone-number and time of the showing.
Showing Your Apartment
- For safety reasons bring someone with you to show your apartment or have someone you can check in with. Line up prospective tenants, so they know other people are interested in your property.
- During this time, you can confirm the details from your previous phone conversation. Does their story deviate?
- Were they on time? Are they well-groomed? Appearances are important because they can give you a clue as to whether or not they will be tidy tenants. Are they polite? And did they offer you references?
- Ask them how many properties they've looked at, and how long they've been searching for a place. What do they like about your place?
- If they bomb the in-person interview, don't offer them a tenancy application. If you need an excuse, tell them you may have already found a prospective tenant.
Do Your Homework
- A fatal landlord mistake is accepting cash from the first person who wants to rent the place. Don't skip this step! Check their credit, references, and talk to their current landlord and current employer.
- Confirm their salary on the tenancy application with their employer. Ask if the potential tenant is a reliable employee, and tidy. Would they rent their home to this employee?
- Ask the landlord if she/he had any problems with them? Did the tenant pay the rent on time, were they any damages to their home?
- Don't rely on the phone numbers listed on the application for their employer or landlord. Use the internet to verify the contact numbers.
- To increase your chances of finding the ideal tenant, have a large pool of tenants to choose from. The ideal tenant may not pick you, or change their mind about renting your property. Don't stop showing your home after you think you've found the perfect tenant.
After Choosing Your Tenant
- After selecting your tenant, phone the tenant to inform them of your decision. Ask for a damage deposit to secure their tenancy.
- Arrange a time to meet with them at their current residence to sign the lease agreement. By meeting them, you can view their current surroundings.
Be sure to keep well documented records, about keys given, damage deposit, and an agreement on payment of moving fees. Educate the tenant about relevant bylaws. And good luck!
