Owning a Successful Income Property
So, you’ve decided to rent out your home. Maybe you’re going overseas for an extended period of time, or perhaps you’re just looking for an increase in cash flow. It all seems like a good idea until your tenant completely destroys your property.
Although there are many headaches that go along with a rental property, there are plenty of good reasons that will outweigh the bad.
Renting out your home is a risk, and mitigating risks means being prepared. Understanding the drawbacks of converting your home into a rental property can save you time, money and a lot of frustration.
Do Your Research
It’s a good idea to get tips and advice from friends and family who have experience with rental investments. It will help for you to get an insider’s perspective and consider things that you wouldn’t have known to think about in the first place.
Do the calculations and proper budgeting for yourself to know your break-even point. You want to ensure that you will see a return on your investment and know exactly how much profit to expect every month.
Find Tenants You Can Trust.
Find tenants that fit with your property and get to know them before handing over the keys. While renting to friends and family seems like a great way to avoid a lot of problems, it can create a whole set of new ones.
Instead, get to know your potential tenant by conducting a proper background check. Find out their credit score as well as renting history. Make sure to do a criminal background check as well.
Even if you have homeowners insurance, always encourage your tenants to purchase renters insurance. This will help them to feel secure as well as yourself. Look into Rental Property Insurance for yourself, although it’s much like Homeowners Insurance, it will offer some beneficial added coverage.
Like with any investment, make sure to do your due diligence by looking into any tax codes or by-laws relevant to investment properties. Review the Residential Tenancies Act to stay informed of both yours and your tenant’s rights.
Make sure that you are prepared to make any repairs on the property and have the time to keep up with any daily maintenance. Failure to keep your property up to code or ensure that your tenant’s needs/rights are being upheld could result in lawsuits from your tenants.
Already own an income property and looking to keep it stress free? Here’s another great article: KEEP YOUR RENTAL PROPERTY INVESTMENT STRESS FREE