You made it. You are a real estate investor; a Landlord. Now What?
A conversation with: Audrey Bailey @audreybailey.realtor
With the recent real estate market changes and price drops, there are many new investors in the market. You may be a first-time investor who has finally been able to scoop a cash-flow positive property, or a home-owner unable to sell your home so you’ve decided to rent it out instead. I’ve outlined some of the most common responsibilities.
Know your role
As there’s a large number of new landlords arising, you need to be aware of your role. As a landlord, you cannot do as you please. You have to follow the guidelines set out in the Residential Tenancy Act. The Act sets out the rights and responsibilities of landlords and tenants who rent residential properties. You should also know that the Landlord and Tenant Board (LTB) resolves disputes between tenants and landlords. It is similar to a court. You can find further information here: tribunalsontario.ca
Finding & Screening Tenants
Finding the right tenant(s) is essential for any landlord. You’ll need to advertise your property, screen potential tenants, and run background checks. Ask for proof of income, references, and a credit report. You need to ensure that your tenants will be able to pay their rent on time and take care of the property. You should also make sure to have a detailed lease agreement in place to protect your rights. You can get help from The MINK Group for this step. This can help save you a lot of time and hassle.
You need to make sure that your tenants pay their rent on time and in full. To do this, you should put in place a payment process that works for you and your tenant; for example, receiving an e-transfer on the first of each month. Having an early rent bonus or late fee policy in place is also a good idea.
This will help ensure that tenants are aware of the consequences of not paying their rent on time. You should also have a written record of all payments and late fees. We have a Mink Group ledger to help keep track of payments, if you ever need it, just send us an email. This will help protect your rights in the event of a dispute.
When it comes to rental increases, you can only increase rent once every 12-month period, you must provide 90 days’ notice in writing and you must follow the Ontario rent increase guideline which is set every year. For 2023, it is a 2.5% increase. Should you ever have issues with late payments or non-payments, there are forms on the Landlord/Tenant Board website for you to use and if you’d rather have an off-hands approach, we suggest you can reach out to a legal team.
Making Necessary Repairs
When you become a landlord, you are responsible for making sure that your rental property is in good condition. You are responsible for making necessary repairs and ensuring that all appliances and systems are working properly. It’s important to have a schedule in place for regular inspection and maintenance of your property. You should also have a policy in place for how you will handle emergency repairs and who will be responsible for them.
Generally, the tenants should be responsible for ongoing maintenance such as changing lightbulbs, lawn care, and cleaning. But, if they fail to do so, it is ultimately the landlord’s responsibility.
Health & Safety
As a landlord, you need to ensure that your rental property meets all safety and health regulations. This includes ensuring that the property is up to code with working smoke and carbon monoxide detectors, and is free of any hazardous materials. You should also make sure that any appliances or systems are regularly inspected and maintained. You can get the help of a property management company for a monthly cost if preferred.
Maintaining & Protecting Your Investment
As a landlord, you are responsible for maintaining and protecting your investment. This includes regular repairs and inspections, as well as protecting the property from any potential damage or theft. You should also make sure that your insurance policy is up to date and includes coverage for any potential incidents.
Being a landlord can be a lot of work, but it can be incredibly rewarding. By taking the time to understand your responsibilities and creating a system for managing your rental property, you can ensure that your investment is protected and that your tenants are taken care of. If you have any further questions, we are always happy to assist with your real estate portfolio.
Audrey Bailey @audreybailey.realtor
Bilingual Real Estate Sales Representative
Coldwell Banker Community Professionals, Brokerage