It seems like a fabulous idea, doesn’t it? Rent out a part of your home and use the rental income to make your monthly mortgage payment. Live “rent free” while at the same time enjoying the tax benefits of rental income write offs!
In reality, however, there are a common set of issues that can arise. Difficult tenants, unanticipated costs, insurance claims plus the stress of not being able to find a stable, long-term renter are just a few of the things that homeowners should consider before becoming a landlord.
Additional Monthly Income!
You are earning money that can help you pay your mortgage, property taxes or other bills.
Renovations increase value
Renovations that you make to accommodate your tenant will also increase your home’s resale value.
Before renting out your home you need to make sure that it is in safe and prime condition. In many cases, a large or small reno may be required. Plus, don’t forget that every problem your tenant has now has become your problem. Repairs can not wait – your tenant will have an expectation!
Consider the impact to your Resale Value
The thought of selling may seem a far of distant thought but it is still important to consider NOW what the long term impact will be to the future of your home. Some potential buyers might appreciate having a rental portion of their new home but some may not want the responsibility that comes along with it.
Not all tenants are reliable, and you are really counting on a stranger to be reliable. Be sure to utilize the Landlord and Tenant Act – it can give you a good idea of some of the issues that landlords face.
Regulations – Follow The Rules
Renting out part of your home automatically puts you under numerous provincial and municipal regulations. The result of not following these rules is large fines. When a landlord can enter the area rented, and the types of property that fall under provincial or territorial tenancy legislation are both topics that both tenants and landlords should be thoroughly knowledgeable about.
Repairs seem to occur a lot more often when housing tenants – this is after all, your home, not theirs, and the investment made is substantially different. Ensure that you are budgeting for repair costs when you consider becoming a landlord in the first place.
Renting out your home can definitely be a viable source of income when done right. Follow the rules and properly maintain your property. You are embarking on a huge responsibility that will require patience. Nothing that is worth doing comes easily!