As a source of additional income, renting out a house or condo can be both exciting and nerve wracking. From wrapping your head around small legal details and finding a good tenant to handling the unexpected, an ounce of prevention is worth a pound of cure.
Discover these eight common mistakes and how to avoid them to ensure your experience is as (nearly!) stress-free as possible.
1. Not Preparing the Rental
Forget, first and foremost, the idea of renting your house or condo “as is” and that this won’t cause any problems.
Before you advertise your property and start scheduling visits make sure everything is clean, working properly, and welcoming:
- Apply a coat of paint.
- Complete minor repairs.
- Clean the rental top to bottom.
- Improve the lighting.
Offering a poorly maintained or run-down house or condo for rent is like going to a job interview in your pyjamas: it doesn’t make a very convincing first impression. You may even end up having to lower the rent!
Keep in mind that you’re more likely to attract serious tenants with a well-presented rental.
2. Setting an Unreasonable Price
It’s a classic error: setting the price too high “because your neighbour managed to rent at that rate.” Except that every rental has its own unique characteristics, and the market changes depending on the neighbourhood and the time of year.
A price that is out of touch with reality may scare off potential tenants, leaving your property empty for several months (and leading you to incur a financial loss as well!).
So how do you establish a fair price?
- Consult rental ad sites.
- Compare the prices of similar rentals.
- Ask a real estate broker for advice.
3. Not Vetting Tenants
Accepting the first person who comes along because they seem reliable, without a screening process, is like playing Russian roulette with your property. And believe me, no one wants to end up with a bad tenant.
Before you sign anything, take the time to
- speak to their former landlords to find out how satisfied they were with the tenant;
- confirm their financial stability with a credit check and by calling their employment references.
4. Not Signing a Lease Agreement
Even if you’re renting to a long-time friend or acquaintance, it’s essential you sign a written lease. It protects both parties, clarifies each person’s obligations, and avoids misunderstandings. And this applies to smaller agreements too: everything must be in writing!
A simple verbal agreement puts you at risk. Without a written lease, you will have no basis on which to assert your rights should something happen (late rent payment, damage, early departure, etc.).
The lease form provided by the Tribunal administratif du logement (TAL) is a trusted and recognized tool. Fill it out carefully and keep a signed copy.
5. Overlooking Insurance
Every owner renting out their property must absolutely have landlord insurance. It provides liability coverage as well as protects your property and your income in the event of a claim. You should equally encourage your tenant to purchase their own tenant insurance.
6. Ignoring Your Legal Obligations
Renting out a house or condo involves more than just posting an add, then collecting the rent. There are rules to follow:
- The dwelling must be safe, sanitary, and conform to standards.
- You can only ask the potential tenant to provide certain types of personal information.
- Rent increases must comply with the TAL’s applicable percentages.
- Etc.
In short, make sure you do your research! An oversight can quickly turn into an administrative—or legal—dispute.
7. Not Communicating With the Tenant
Renting is a human relationship. Happy tenants tend to stay longer and take better care of your property.
Answer their questions, clearly explain the house rules, and intervene quickly if there’s a problem.
8. Not Hiring a Broker
Although not all brokers accept rental contracts, every landlord can benefit from the services of those who do. These professionals can oversee visits, explain the house rules, and fill out paperwork with tenants, saving the property owner a tremendous amount of time!
To find a RE/MAX Real Estate Broker near you and to rent your property quickly: [ START MY SEARCH NOW ]
With a little preparation and plenty of discipline, you too can ensure your peace of mind as a landlord… until the tenant calls you at two in the morning because the hot water tank has sprung a leak!
