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Do you truly want to rent out your property?
Sep 04, 2015
Are You Considering Renting Out Your Property?
"Renting out an investment property can be a great stream of additional revenue. However, problem tenants are…problems, according to GCY Lawyer Brian Diamond, "The Landlord Tenant Board can be an expensive and frustrating place for landlords so screening tenants is extremely important. Equally important are the terms of the lease. It’s your contract; make sure it says what you want it to."
Here's a recent article on this sometimes contentious issue:
Adapted from Garry Marr Financial Post
Property management is an expensive option used by some property investors to keep tabs on their real estate.
Brad Lamb, real estate developer says about 99% of the people who lease are problem free but you have to keep your eye on the 1%.
Ho Tek, a partner of Domus Management says that hiring someone to deal with your property from collecting rents to making repairs can easily cost 5% of your gross rent.
One of the problems for landlords in some provinces including Ontario, is that you can’t ask for a security deposit for damages.
Recently, an article in the National Post demonstrated a problem one property investor had. She rented her home out through a reputable real estate agent for $4000.00 per month. She was confident the agent had vetted the prospective tenant and the lease was signed only to find that the tenant built a series of partitions and had 16 units leaving the owner vulnerable to fines for running an illegal rooming house.
Brad Lamb had also been contacted by the same tenant but he was weeded out due to the list of demands all tenants have to meet before being approved. This includes, a credit report, background check, two last landlord references, letter of employment and pay stubs.
Can someone slip through that could be a problem? Of course it is possible.
Lamb says that real estate agents involved with rentals make so little commission that the incentive is not there to ensure the prospective tenant checks out.
Even if you use a company to find a tenant you still need to manage the property in the future.
Don Campbell, owner of the real estate investment network , says regular inspections are very important even if you have a property management to ensure your property is well looked after to protect your investment. Some me people haven’t gone to inspect their properties in four or five years . He also said that a lot of renters sublet their place on sites like Airbnb. They are doing it without background checks. This can be ultimately detrimental to the owner even though most leases have a clause which specifically disallows subleasing without the approval of the landlord.
This can be a problem down the road and may require legal help.