| Have
you ever considered buying an investment property to rent
out or renting your personal residence, but were unsure of
the potential problems of renting?
Real estate has been one of the best long-term
investments, but many potential investors give up on the idea
because of property management jitters. If you don't have
time to look after a property, there are many property management
firms to undertake this for you. Make sure the one you choose
has the proper qualifications and is licensed. A professional
firm will be insured, bonded and licensed in accordance with
the Real Estate Act of British Columbia.
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However, if you decide to undertake your own
rental management you should consider the following.
1-Rental Rate. The rental rate you set must
be competitive. Clients are astute and may have seen many
properties before they come to view yours. They will know
if it is overpriced. Some may make offers, but if they feel
your property is overpriced, the offer will likely be below
market value. Remember, if you price correctly you will rent
faster and will also get better tenants, as you will have
more applicants to choose from.
2-Advertising. Advertising is important. You
want to expose your property to as many potential tenants
as possible for the least cost. Choose a newspaper that targets
readers in the area of your rental property and keep the ad
short and precise. If you are able to display pictures of
the property on the internet, refer to the internet address
in your ad. An internet display can give you an edge over
other properties and save a lot of time for clients.
3-Preparing the Property. Make sure your property
shows well. Remove any clutter, dirt and odours. The first
impression is important.
4-Showing the Property. Be as accommodating
as possible. People will not wait around unless your property
is unique. Stack showings, as many people at once can create
a sense of excitement about your property.
5-Taking Applications. Ask the applicant to
fill out a detailed questionnaire giving previous landlord
references, bank references, employment details and giving
you the authority to do a credit check. Check all references
and credit thoroughly. Check with the realtor if the applicant's
previous residence was sold. The perfect tenant will treat
your rental unit with respect, will pay the rent on time,
and won't damage the property. This is the tenant you want
to find. It may be cheaper in the long run to leave the rental
empty for a month or two rather than to rent to the wrong
person. Don't be tempted to forego the checking process if
a tenant is anxious to rent immediately.
6-Accepting/rejecting Applications. Once you
have decided to rent to an applicant, act quickly. Meet with
the tenant to sign a lease and take your deposit as soon as
possible. The applicants you do not choose may call and ask
for a reason why they weren't accepted. Never give a reason
other than "the place is already taken" as giving
reasons can lead to legal consequences.
7-Preparing the Lease. Preparing a lease is
fairly straightforward. There are standard leases to be obtained
from the Residential Tenancy Branch or the internet. You may
wish to add property-specific clauses such as who looks after
the garden, pool, etc. It is a good idea to add a clause requiring
the tenant to carry insurance, including liability insurance,
naming the owner, as well as the tenant. The tenant's insurance
should also provide for the tenant to be paid additional living
expenses should the tenant have to move temporarily because
of a major incident such as a flood or a fire. Furthermore,
you may want to make the lease a fixed-term tenancy agreement
with an absolute expiry date. This way, you have the option
to extend the lease or decline an extension.
8-Moving the Tenant In. Before the tenant
moves in, make a detailed condition report of the property.
The Residential Tenancy Act now requires that such a report
be filled out and agreed to by both the tenant and the landlord.
In addition, take as many photographs as you can of the property
on move-in date. Date and time-stamp them if possible.
9-Property Maintenance. You must provide premises
fit for human habitation. This means they must be safe to
live in and not a health hazard. All apparatus must be in
working order, and it is your responsibility to keep them
that way. If something breaks down, you must have it repaired
within a reasonable period of time. The tenant is required
to keep the property clean and habitable and undamaged. If
the tenant damages the property whether intentionally or accidentally,
the tenant is responsible for the repair.
10-Tenant Relations. Always maintain a courteous,
professional relationship with your tenants. It is often harder
to deal with problems if you have become friends.
11-Rent Collection. Insist on post-dated cheques
when the lease is being signed. This simplifies rent collection.
The new Residential Tenancy Act allows landlords to make post-dated
cheques a condition of the lease.
12-Checking the Property. Under the new Act
you now have the right to inspect your property when you wish,
with proper notice. Drive by occasionally, and if you feel
something is awry, give notice to inspect. Be thoughtful if
you have good tenants, not to bother them too much. The new
Act gives you the right to end tenancies for illegal activities.
13-Moving the Tenant Out. When moving tenants
in and out, prepare a move in/out list with photos. If there
is a dispute, nothing is clearer than a picture. The standard
residential tenancy lease comes with property condition forms
for moving tenants in and out. You must complete these, and
failure to do so will result in losing the right to claim
damage against the security deposit.
14-Dispute Resolution. Try to resolve any
disputes with the tenant. If you cannot, then you can go to
court, or arbitration at the Residential Tenancy Branch. Details
are crucial now, including notes, a proper lease, and photos.
The new Act allows landlords to serve notice to tenants by
posting a notice on the front door, an improvement over the
previous arrangement of having to send registered mail.
Owning a rental property can be rewarding
and a good investment. The key to a trouble-free experience
is finding the right tenant. This may not be the first person
who is willing to rent the property, so take the time to do
your "due diligence."
And as said at the beginning of the article,
if you don't have time to manage your rental property yourself,
then consider a qualified, professional property management
firm. They will be insured, bonded and licensed in accordance
with the Real Estate Act of British Columbia.
What
is a Lease? |
Are
There Different Types of Leases? |
Extending
a residential lease |
How
do I extend the lease?|
How
much will it cost? | Lease
Extension |
Car
and Vehicle Leasing |
Example
of Lease Agreement |
Extension
of Short Leases on Central London Properties |
Rental
Challenges |
