So You’re Thinking About Renting Your Property?
Shows on television these days can make renting out your home sound pretty appealing – who wouldn’t want to have someone else pay off their mortgage? Being a landlord can be challenging and come with a number of rules and regulations. Before you start advertising your rental property or begin creating a basement suite, it’s important to do your homework.
Here are a few tips to keep in mind while making the decision to rent out your home:
The first thing to do is to work out whether renting your property really is financially worthwhile. If you are renting just one property, and you work full-time, it can be very exhausting, having to deal with tenants on top of that. While creating your financial plan, you must take into account the cost of renting the property out, including any renovations that will have to be done to the property. Also take into consideration that there will be ‘void periods’, where your property will be vacant, in your calculations.
Spend enough to make your property a tempting proposition – predominantly if it is a family home. Parents with children will be more concerned about cleanliness and safety issues than young tenants. Be flexible and don’t put in unnecessary limitations on pets and children unless you have a real reason to do so. Always make sure your home is safe to be rented out, you may need to step back and put yourself in their shoes.
The rental income you get from a tenant renting your home is taxable. You must claim the rental income you receive each year. However, there are certain things that can balance against the tax. These include mortgage interest payments, management agency costs and maintenance expenses against the taxable rental income.
Do your research and make sure you are aware of the current rental market prices. You can call rental management agencies or compare different websites such as Rentza.
Make sure to talk with your insurance company. It is very important to let your insurance company know the property is being rented out. When you are renting your property out, you are still responsible for home insurance on the property. A landlord’s insurance policy will cover you from financial losses connected with rental properties.
Depending on your situation you may decide to use a management agency to rent out your property. If you decide to go this route, be aware that they could keep a large percentage of your rental income, sometimes over 20 percent. If you decide to use a property Management Company, make sure they are certified. CPM (Certified Property Manager).