Deciding to become a landlord is no small task – it can bring in a great deal of revenue and experience to Ontario homeowners, but it can also be a major headache for people who are unprepared for many of the unexpected twists and turns that come with being a landlord. Our team of property management experts have prepared some tips for first timers in order to help you avoid renting to or being swindled by a bad tenant, avoid legal troubles that come with breaking regulations, and to ensure that your first time being a landlord is a positive experience.
Don’t overextend on credit
One of the most useful tips for first time landlords is to not overextend on your credit. While there is money to be made through property investments, it’s important to invest wisely. Start small and don’t spend more money than you have; if you can’t afford a prime piece of real estate in Toronto’s downtown core, that’s okay. Starting small with a single-unit property is one of the easiest ways for inexperienced landlords to carefully dip their toes into the real estate market without breaking the bank.
Familiarize yourself with Ontario’s housing regulations
Once you’ve made the decision to invest in the real estate market, your next step should be to familiarize yourself with Ontario’s housing regulations like the Residential Tenancies Act, and the governing bodies that uphold those regulations, like the Landlord and Tenant Board. Being aware of and well-versed in these regulations will ensure that you treat your future tenants fairly, that you will be an effective and respectable landlord, and most importantly, that you will stay out of legal hot water during your time as a landlord. This process will also help you to familiarize yourself with local guidelines to ensure that your new rental property is legal according to municipal bylaws.
Know how to market your property to the right audience
Before renting to a tenant (unless you already have one in mind), you’ll first need to go through the actual searching process. New landlords should be aware of how to properly market their available property to the right audience – if your unit is designed as student housing, then it’s important to actually market it to students, and if your unit is ideal for families, then market it to families. Not knowing how or where to post your listings will result in a frustrating search for an ideal tenant, as it’ll force you to comb through unqualified or unwanted candidates. Using targeted ads on Facebook, for example, will help you select a specific audience for your listing that you choose, and you can exclude people you don’t want.
Screen your tenants thoroughly to avoid disastrous situations
When you’re ready to find your first tenants, it’s important that you make every effort to effectively screen candidates. This will include meeting and interviewing them in person and obtaining consent to perform credit and reference checks. Asking the right questions and knowing how to identify potential red flags is crucial here – simply renting out your new unit to just anybody might pay the bills, but it’s also a perfect way to end up with a nightmare tenant. While there is no sure way to make every tenant a perfect fit for your property, the most effective is through proper screening. Failing to do so may leave you wishing that you had never become a landlord in the first place.
Make collecting rent a priority
As a new or prospective landlord, it’s easy to lose sight of the fact that being a landlord is a job in itself, and in turn a source of supplementary income for you. Many inexperienced landlords are unsure of how to go about collecting rent, especially once a tenant has missed a payment or only paid partially. Make it clear to tenants when rent is due, and know how to react to missed or late payments – working with tenants respectfully to solve problems is encouraged, but you should also consider filing eviction paperwork when a payment is missed due to the long eviction process at the Landlord and Tenant Board. At the end of the day, this is your business – a disrespectful tenant who consistently misses or dodges rent payments should prompt you to begin the eviction processes and find somebody better suited to your unit, and you should start this process sooner rather than later.
Enlist the services of an experienced property manager
Let’s face it – there’s just not nearly enough time in a day to do everything you need (or want) to do. One of the best ways to ensure that you have enough time to do the things you enjoy and spend time with the people you love is to enlist the services of an experienced property management firm like Highgate. Our team of experts are well-versed in how to effectively screen tenants and identify red flags, deal with emergency and maintenance situations as they arise, and collect rent on time and in full, letting you focus on the more important parts of your life. Additionally, we can help you find your first investment property as Realtors that specialize in rental properties.
Being a first time landlord should be an exciting and rewarding experience – by not rushing into a situation that you’re unqualified for, knowing provincial regulations, effectively screening tenants, and making your expectations known, you’re far more likely to have a positive first-time experience.
For more information about the property management and realty services offered by the experienced team at Highgate Properties, contact us today.