Renting out your residence is a great way to diversify your portfolio and put a little bit of extra cash in your pocket each month. Before you list your pad for rent on the internet though, there are a few things that you need to know beforehand to ensure that you’re making the right decision to list yours with the rest of the rental homes in Toronto, Ontario.
1. Compute the rent. You might be thinking that you can collect “X” amount in rent each month. Before you determine how much your rental property is worth though, you must assess the amenities provided with your property, maintenance fees, and the demand for the property. It’s also a good idea to check with other properties in the area to review how much they are renting their units for. With all of this information, you can more adequately compute the rent
2. Understand the need for background checks. Before you choose a renter to occupy your home, you want to ensure that they will take good care of the property. If your community has certain by-laws or covenants, it’s important to familiarize yourself with them before choosing a tenant. Then, once you have applicants, make sure you have them fill out a detailed application. Be sure to run a background check on them. It’s a good idea to require your applicants to list references and previous landlords as well. Take the time to check them. Doing this kind of research gives you a good idea as to who will be a good tenant and who won’t be.
3. Use a broker. Once you’ve found an applicant, a lease needs to be signed. This rental agreement lays out the terms and conditions of the lease. Now is the time to determine the dos and don’ts for your renters. For example, if you won’t allow pets in your unit, it’s important to put that into these documents. The deposit amount, length of the lease, cleaning terms, and maintenance terms should also be included in the rental agreement. This document should be clear and concise. Both parties should read through the terms and sign them.
4. Are you ready to be a landlord? Being a landlord isn’t for the fainthearted. You’ll be dealing with late rent payments, sob stories, and possibly evictions. Plus, as a landlord, you’re required to handle all repairs and maintenance needs of your tenants. While you can turn these responsibilities over to a management company, it will dip into your profits. Before you rent your property make sure that you are ready to be a landlord or pay to have someone manage your property for you.
5. Require notice. To prevent a lapse in rental income, it’s important that your tenants give you adequate notice of their plans to vacate the home. If you’ve written vacancy terms into your rental agreement and they don’t observe the terms set forth, it could impact their deposit or the reference you give them in the future.
Placing your property for rent in Toronto, Ontario is a big decision. With the right preparation and knowledge though, it could end up paying off in the future.