Looking
at houses as an Investment
10 Tips for Turning Your Home into an Income
Property
If you’re looking for a way to increase
your income, you may need to look no further
than your own home. These days, more and more
Canadians are turning their homes into income
properties. An income property is a home that
is bought or developed in order to generate
income, typically by renting it out in part
or in its entirety. Renting can be a financially
rewarding experience, either to provide extra
income, or to help pay off a mortgage. So if
you’re thinking of going the income property
route, here are 10 important steps you should
take:
-
Contact your local or
municipal government to first determine if
you are legally permitted to turn your home
into an income property. Work with them to
ensure the unit adheres to all existing building
and fire codes.
-
Get to know the landlord-tenant
relationship regulations in your province.
These laws will give you a better understanding
of your role and responsibilities as a landlord.
-
Inform your insurance
company about your plans for renting out space
in your home and ask them if you require any
additional coverage.
-
Get your home “renter-ready”.
From a simple change such as a fresh coat
of paint to a major renovation, try and make
your home look and feel as spacious, bright,
and comfortable as possible. Your home should
look appealing inside and out in order to
attract potential renters.
-
Price and market your
unit competitively. Scan the classifieds and
visit rental websites to find out how much
similar units are being listed for.
-
Conduct a screening process
for applicants. Consider running a criminal
background check, as well as a credit check,
on prospective tenants.
-
Draft a written tenancy
agreement. It may contain information such
as: the date the tenant will move into the
rental unit, the rent amount, the date rent
is to be paid, what services are included
in the rent (such as electricity or parking)
and any separate charges, as well as the rules
that you require the tenant to follow.
-
Consult a lawyer to look
over the contract. Although not necessary,
a lawyer can ensure there are no legal problems
or issues with the contract before you present
it to your tenant.
-
Request a minimum deposit
of one month’s rent in advance that
may be used against any property damage or
unpaid bills, depending on the laws in your
province.
-
Have the tenant sign
the contract. Ensure the tenant receives a
copy and keep the original for your own records.
Happy renting!
