Becoming a new landlord can be both exciting and daunting. A lot of investors jump in head first without educating themselves and often have to learn valuable lessons the hard way.
However, it doesn’t always have to be this way, in fact, educating yourself now can help make you a great landlord which benefits not only you but gives you longevity with your tenants!
So how do I succeed? Great question, here are a few tips to consider when becoming a new landlord.
1. Don’t rush when selecting tenants
Picking the right tenants is the toughest but the most important part of the property management life cycle. Picking the right tenants will either make you or break you as an investor. You want to ensure you’re renting to responsible tenants is crucial to the success and long-term protection of your investment. You’ll need to look for more than a friendly face and a complete application.
Take the time and do this properly, even if it means spending the money to do so. Some companies offer a full screening process on potential renters, including a criminal background check, credit report, and employment and rental history. A tenant’s unwillingness to complete a background check, a history of eviction, or a history of late payments can all be possible red flags.
The eviction process in Ontario can be expensive, time consuming. You need to ensure you’re doing the proper research before renting out your rental property.
2. Understand the Residential Tenancies Act or laws in your Province
Landlords need to understand how the Residential Tenancies Act (RTA) in your province area set up and most importantly, stay informed of any changes to the laws as they occur.
The legislation is complex and written in legalise, so ensure you familiarize yourself with it. You can seek guidance from local landlord associations or experienced landlords that can help you understand the important laws and how to follow them in your rental business.
You may also consider hiring a property manager to help you navigate and follow housing laws. The legal process is not a forgiving one, so it is vital to adhere to the proper landlord laws to avoid liability and significant fines. Putting yourself at risk is not worth it, and understanding rental laws should be every new landlord’s top priority.
3. Ensuring regular property inspections
Successful landlords take a proactive approach to maintenance so that issues are discovered before they become a bigger problem—or even before your tenant reports a problem. Unfortunately, even the best tenants will never be as invested in the longevity of your property as you are, and most tenants have never been homeowners themselves. Be sure to schedule move-in and move-out inspections when you are experiencing tenant turnover, and make immediate note of any new damages or issues that need to be addressed.
One of the top reasons people are hesitant to get into the business of land lording is due to the expenses that result from either regular wear and tear or serious tenant damage. Always address maintenance issues in a timely manner to avoid a bigger problem down the road. Create a safety checklist for yourself to ensure that all areas of the property are well-maintained—especially areas that tenants may not regularly pay attention to.
Plan to complete seasonal inspections if you live in an area that requires different maintenance for different seasons. Clearly spell out in the lease agreement which maintenance tasks are the landlord’s responsibility and which are the responsibility of the tenant, such as sprinklers, changing air filters, or maintaining any laundry equipment.