There are many reasons why homeowners choose to get into the
rental market. Many choose to rent out their home or Condo while waiting for
the Calgary Real Estate Market to improve. Some homeowners want to generate
rental income from a second home or vacation property. Still others find
themselves with multiple properties in hand after large life events, such as
marriage, relocation, or inheritance.
Regardless of the reasons for getting into the business of
renting properties, it’s important to get started on the right foot. That
involves asking yourself some hard questions, doing your research, calling in
the experts, and even putting in some elbow grease to get your property ready
for the rental market. Here’s a quick guide to what’s involved.
Mull it over
Owning a rental property is much more than just collecting payments every
month. As a landlord, you are legally responsible for providing a safe, livable
home for your tenants, as well as maintaining the property with timely repairs.
Consider that owning and maintaining rental properties is running a business.
Ensure that you have the time, resources, skills, and patience for the
often-unpredictable nature of the industry.
Do your research
Take a long, hard look at your rental unit and write a list of its attributes,
including square footage, neighborhood, number of bedrooms and bathrooms,
amenities, and yard size. Then, search for comparable units online to get a
good idea for how much you’ll be able to charge.
Number crunching
Once you know how much you’ll be able to charge for your rental property,
consider additional costs, such as the increased price of homeowners’
insurance, the cost of maintenance and repairs, unanticipated damage by
occupants, carrying costs between tenants, and advertising, to name a few.
To outsource, or not to outsource?
If you are interested in renting your property, but don’t want to fulfill the
role of landlord, consider hiring a property management company. In exchange
for a monthly fee, property managers will find and screen tenants, serve as the
main point of contact for occupants, manage repairs, collect rent payments, and
tackle other duties.
Consult a lawyer and accountant
Rental income must be reported on your taxes, but some expenses may be tax deductible.
Consult a qualified accountant to explore the potential financial gains and
losses that come with renting property.
Additionally, consult a real estate attorney in your local area.
While you may be able to find sample rental contracts online, a lawyer who is
familiar with laws and regulations in your local area will make sure that the
lease agreement your tenants will sign is legal, proper, and protects you
in case of unexpected events. Alberta Landlord and Tenant is another great source for lease agreements.
With good preparation, consultations from experts, and an honest
look at the finances involved, homeowners can find renting property to be a
beneficial way to increase income, delay selling a home until the market
improves, or cover costs associated with owning multiple properties.
Considering Buying a Rental Property
In addition to the information above there are many other things to consider including the choice between a house and a condo. For information on Investment Properties contact us.
Tags: Landlord, Property, Real estate