Here are the things you need to know before becoming a landlord.
Make sure you aren’t decreasing your home’s value.
Before you even get started on preparing your income property, you want to take into consideration whether or not the addition of a separate rental unit will impact the resale value of your home. While you will be making monthly income through rent after the unit is completed, you may not necessarily make more money on the sale of your home should you choose to sell it in the future. The Raymond Yong Real Estate Group can help to determine whether or not adding an income space to your home will be beneficial in the long run. We can be reached at (416) 906-9863 or [email protected]!
Make it legal.
If you’re going to rent a space in your home, do it right or don’t do it at all. Putting the necessary work into your space to comply with all laws and codes will save you from costly updates down the road that can also hurt your business and get you into financial trouble. It is also recommended to do your research before committing to your rental space to be certain you are willing and able to commit to the job, and doing it legally.
Make your profits reasonable.
Once your space is ready and you’re ready to look for tenants, budget appropriately to determine how much you should charge in rent. Keeping in mind that there will be taxes, utilities, etc., and your profits will not be the total sum of what you charge, you will need to make a long term plan of what you want to get back from your income property – and stick to it.
Make staging work for you.
You may consider staging an unnecessary evil unless you’re selling your home. However, this can be equally as useful when looking for renters. When you’re looking for tenants, stage your property in simple ways to make it look more finished, more desirable, and more respectable. This will in turn attract respectable residents.
Make your space fit your desired tenants.
You don’t need to throw millions of dollars into your in-law suite just to get the right tenant, but putting in some lowkey extra effort and paying attention to smaller details will impress the right people. A nice paint colour, some good lighting, and good quality finishes will attract tenants who appreciate these things in their home and will therefore be more likely to take care of them.
Make your choice in tenants carefully.
One of the best things you can do to ensure you make optimal financial inflow from your property is to minimize the amount of money you need to put into it. A big way to do this is to ensure you don’t need to repair or replace anything more often than necessary. Choosing a tenant who will not require you to make unncessary repairs due to damages could save you thousands of dollars. Make the right choice in tenants by fielding all applicants appropriately and checking references before getting them to sign the lease.
Make yourself useful.
Save time and money by knowing how to do a few basic things around the house. Calling a plumber at 3:00am is a bit more costly than knowing how to shut off a water valve yourself, so it pays to educate yourself. There are resources out there to help you with this – everything from local classes and courses to YouTube tutorial videos.
Make it your job.
You need to expect that being a landlord will become your part-time (or even full-time) job. Even if you are only managing a basement apartment, you will still be required to put in whatever hours are necessary to manage the space. This can include anything from last minute repairs at odd hours to unexpected vacancies that last longer than you have budgeted for. This just means that you need to be prepared to put in the time to make your rental property profitable and accommodating.
Overall, becoming a landlord requires a lot of time and personal commitment. To ensure you are profiting and reaping the rewards of what you put into your income property, make sure to follow these eight points and you will be on your way to success!
