Tips for First Time Landlords

Tips for First Time Landlords

Should you take the plunge on a rental property? Experts offer a qualified yes! Investing in a rental property can be profitable, but it’s not without risks. Here are some valued tips we’ve compiled for first time landlords:

Determine if buying an investment rental property is right for you:

Before you leap in, you’ll want to consider whether you have the time, willingness and skill to put into managing a rental. While rental property is considered a passive investment, that doesn’t mean you’re fully passive in managing it. Over the long-term, real estate investments may compare favorably to other long-term investments such as stocks, but the results can vary significantly depending on the circumstances of the region and specific property. You’ll want to consider whether you think you can increase rent payments over time and why the economy surrounding the property would support that, among other issues.

Budget for the unexpected:

As a landlord, you want to save about 20-30% of your rental income for upkeep, maintenance and emergencies. You always underestimate all the different expenses that have a way of coming up and always overestimate just how positive the cash flow is going to be.

Understand how rental law works:

Provincial and local landlord-tenant laws can act like an open manhole cover for rental owners who ignore them. Case in point is tenant security deposits. It’s not as simple as collecting and holding the money. Security deposit laws govern how much time you have to return a security deposit when tenancy ends, less any expenses for cleaning and repair, all of which have to be itemized. Of course, this is only one aspect of the laws surrounding rental property, and there are many others that landlords must know in order to avoid running afoul of them. You’ll want to be familiar with rules around eviction, fair housing and other regulatory requirements.

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