Are you ready to become a landlord? Renting out a home is a great way to bring in some income—one that can provide a more flexible lifestyle than most forms of employment. It’s no wonder so many investors are looking to get into the market. Having said that, if you’re thinking of taking on a tenant, understanding your responsibilities is crucial. Doing so will allow you to make a more fully-informed decision—and maximize your potential success!
If you’re thinking of becoming a landlord, here’s what you need to consider…
Picking the right home to buy
While it may be tempting to purchase something in a hot local neighbourhood, the home prices in these areas can leave buyers with a negative monthly cash flow. In many cases, you’ll be better off opting for an attractive property outside the core. Of course, it may take a little bit longer to rent out a place in a community that’s not considered prime. That said, doing so often results in additional cash flow. House prices in these communities tend to be significantly lower, while average rents are often similar to those you’ll find in more popular neighbourhoods. Not only that, but you’ll see value appreciation as the area develops over time!
It’s not a 9 to 5 job
Landlords don’t punch time clocks, and they don’t work regular hours. Some days, the job is straightforward. Others, it’s bound to be labour intensive and exhausting. It’s just the nature of the work—your responsibilities can change in a flash. For example, you might plan to swing by your property for a short visit when (unexpectedly) you encounter a tenant with a small plumbing leak. From there, you’ll need to decide whether to handle the issue personally, or call a plumber to assess the situation. Either way, addressing the problem immediately could turn your ten-minute visit into a three-hour ordeal!
Meeting your potential tenants
We’ve all heard stories about nightmare tenants. The ones who damage property, generate endless noise complaints, and (in extreme cases) stop paying rent altogether. What can you do to avoid them? Fortunately, there are a few steps landlords can take to protect themselves. Our in-house leasing expert (Justin) can review potential tenant credit reports (available through agencies like Equifax and TransUnion) along with references from employers and past landlords. Using this information, he’ll assess whether there’s any undue risk associated with renting to a particular tenant. In addition, he can set up a one-on-one meeting between the two of you to see whether you think you’ll be a good fit.
While being a landlord may be stressful at times, it will also allow you to act as your own boss—and enjoy all the personal freedom that goes along with it. Another possible reward? The relationships you may develop with your tenants. Put simply, providing a home for another human being is a true accomplishment—one you can be truly proud of!