Deciding to become a landlord can be an exciting decision. If you’ve recently purchased an investment or rental property or are looking for one, you’re about to become a landlord. Being a property owner is a huge responsibility. It is important to understand that you’re entering into a business and should conduct it as one.
Find out more about managing properties and what steps you will take in your role as landlord. We also look at what property management companies do and how they can help landlords.
Find Resources There are many organizations and resources you can access to find the information you need. You’ll need to understand any legal obligations, taxes, budgeting, making home repairs, and more. This resource from the BC provincial government is a great place to start. Other resources to look at include Landlord BC and the Canada Landlords Association.
You’ll want to have a good understanding of provincial rules and regulations. Contracts, forms, and how to handle disputes will also be important to learn.
Screening Tenants When you have a rental property, or investment property you rent out, dealing with tenants will be part of your role as landlord. The first step will be screening tenants. Some of the things you’ll want to review are the terms of the agreement, deposits, pets, number of people living in the unit, etc. You may also wish to run a credit check and speak to previous landlords.
This may be a long-term relationship, so you want to do your due diligence up front. Have forms, contracts, and rental agreements ready.
Go the extra mile for great tenants, such as a holiday gift, to keep your good tenants happy and reduce tenant churn. Having a rental property sit empty while you look for new tenants will cost you money as you may go for periods with no rental income.
Have a Maintenance Plan for the Property Know in advance how you will take care of maintenance issues. Are you going to be handling them or do you have trusted tradespeople you can call? Maintain records for the regular maintenance required on the property but prepare for emergency situations as well.
Check Your Insurance Coverage Make sure you have enough insurance for your property whether you are living in it or not. It is necessary to protect your investment. Depending on the property type, location, and occupancy, you may need additional insurance coverage.
Banking and Taxes Set up your banking for rent collected and to help with financial reporting. On an ongoing basis, have a plan in place for dealing with any financial disputes. Maintain all of your records. Set aside or budget for capital expenditures that may be needed, such as a new roof or updating electrical.
Having a rental property will require some changes to your tax return. When it is tax season, speak to your tax professional to file your taxes correctly. Check out some of the tax benefits available to landlords.
Working With Property Management Companies For many landlords, it can be cost-effective to hire a property management company to oversee their rental property. A reputable property manager will understand and comply with local laws and regulations.
The property management firm will market the investment property, screen tenants, conduct inspections, and have the appropriate forms. For ongoing rental management, they will take care of collecting rent and will have access to tradespeople for regular and emergency maintenance. A local property management company will also understand the real estate market and advise you on how much rent to charge and any other needs or opportunities to take into consideration for that local area.
Hiring a property management company might make especially good sense if you don’t live near the rental property. This can also be a good option if this is your first investment property and you’re still learning how to be a landlord. If you just don’t want the inconvenience of dealing with the day to day issues of your rental property or want to save time, these are also good reasons to consider a property management company or if you have multiple residential properties to manage.
Roles of the Landlord A landlord takes on many roles – realtor, maintenance, bookkeeper, debt collector – and you must prepare to take on all of them, or hire a property manager to do this for you. If you’d like to discuss your rental property situation with us, contact us online and find out more about our property management services or request a proposal.