Becoming a landlord is an exciting prospect with a high earning potential. Purchasing and renting properties enables you to make passive income and build a strong investment business that can secure you financially for the rest of your life.
However, before you rush into anything, it’s important to consider the challenges that you might face as a landlord in Canada. You need to be aware of many intricacies of the property market before you start renting.
Here are four key things to know when renting a condo in Canada.
Legal Requirements
There are a plethora of laws surrounding purchasing multiple properties and renting them out. The real estate laws in each area of Canada are unique, so it’s important to understand the legalities of being a landlord in your local area, including your rights as a landlord and renter’s rights.
Understanding your legal requirements as a landlord prevents legal troubles and enables you to build stronger landlord-tenant relationships. If you need help with managing multiple properties and navigating the landlord world, consider working with one of the many great full-service rental property management companies in Etobicoke or your local province.
Tenant Screening
Having a thorough screening process is essential for finding the perfect tenants for your properties. You will want to find reliable individuals who will pay their monthly rent on time and keep your property in tip-top condition.
Finding reliable tenants using an in-depth screening process prevents future legal battles, financial strains, and stress. Consider asking your potential tenants for references, verify their employment status and monthly income, and conduct credit checks to ensure your chosen tenants can afford to pay their rent and are trustworthy individuals.
Security Deposits
Before you move a tenant into one of your rental condos, you should take a security deposit. This is a fee that you take as a safety net to cover potential damages of unpaid rent.
The exact amount you can take for the security deposit may depend on the laws in your local area, so make sure to check the minimum and maximum limits before you start renting your condos. However, it’s usually the equivalent of one month’s rent.
You will need to return all of the security deposit after your tenant moves out if they have paid their rent on time in full every month and have not damaged your property in any way. If your tenant has damaged your condo or broken any of the appliances you provided for them, you may be entitled to keep some of their security deposit so you can pay for repairs or replacements.
Landlord Insurance
As a landlord in Canada, you will need to purchase landlord insurance, as homeowner’s insurance may not offer as much coverage and protection as you need.
Usually, landlord insurance covers extensive property damage, liability, and financial losses associated with unpaid rent. However, each policy is unique, so be sure to browse multiple options before settling on one particular insurance provider.
