May 7th, 2018 | Renting

Into The Business Of Renting

Landlord & Tenant – Dos and Don’ts

Being a landlord is not always that easy, but we are here to help! Below are some Dos and Don’ts that you may want to consider.

Dos

• Understand the RTA (Residential Tenancies Act)
• Do a good job in presenting a product that attracts the desired demographic (i.e. working professional, young couple vs. rooming house). Targeting the right tenant will save you from a lot of hassle in the future.
• Do your due diligence before committing. Remember that your tenants are living in your property, if anything needs to be fixed, being prompt will always work to your advantage.
• Protect yourself and raise the rent every year per minimum allowed by Landlord and Tenant Board of Ontario (2018 = 1.8%)

Don’ts

• Don’t charge a “security deposit” – it’s illegal under section 105 of the RTA (Security Deposit Limitation)
• Don’t settle! As mentioned before, take care of your tenants and your property.
• Don’t be cheap – go back to the point above, settling now = pain later.
• Don’t be mean – a good Tenant is peace of mind and therefore a good investment.

Learning Lessons (Personal & Client Related)

• Your Tenant is not your friend. Be nice, but not too nice. Remember that you are investing in your property and your tenant is the return.
• You are running a “business” – every business has expenses, if you ignore, your business will fail.
• We already said this: Don’t be mean – a good Tenant is peace of mind and therefore a good investment.
• Don’t be too nice – Tenants have power, but so do you!
• Remember to raise rents. If you haven’t raised your rent in years and then decide to sell your property, the cash flow won’t make sense to a new investor, making your property not as desirable.
• Turnover is good – rents go up quicker!

Hiring a Property Manager?

Now you got a tenant for your property, maybe two or three. This renting business is starting to become your full-time job and you are questioning if you should hire a Property Manager. Here is our advice, summarized in few key points.

Yay if

• You’re too busy
• You don’t understand the RTA and don’t care to learn about it
• You can’t be bothered
• You own multiple investments outside of your primary residence (2+)

Nay if

• You own only 1 investment property outside of your primary
• You can handle it
• You want to learn
• Your margins are too slim (PM fee = 7-12% of GROSS RENT on average)

Other Seminar Notes:

Cash-flow vs Equity – Striking a balance

How to spot a good investment

Investing Solo vs Partnering

Preconstruction vs Resales – Benefits and Pitfalls

Airbnb – Hassle or worth it?

“Mini” or “Container” homes – Are they a thing?

 

Now that you know our dos and don’ts, it’s time to get into this business and start making some good money. Let us guide you.

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