Content courtesy from the Economical Insurance website.
From finding the perfect tenant to getting the right insurance, there’s a lot to think about when you’re renting out a property. Whether you’re a first-time landlord planning to rent your basement to a student or a seasoned pro preparing to list your next property, consider these eight tips to make every rental experience a positive one.
- Get the right insurance for your rental property. Before you start looking for a tenant, reach out to a licensed home insurance broker to get set up with an insurance policy for your rental dwelling.Note: If you’re an absentee landlord (living over 100km away from your rental property) or only want to insure a rental home but not your primary residence, you may find yourself shopping for a high-risk insurance policy.
- Choose a good tenant. Finding the right tenant for your rental space can seem like a challenge. But screening potential tenants properly now can save you a lot of trouble later. Consider asking for references from previous landlords and proof of employment before agreeing to let a tenant move in.
- Think about making tenant insurance mandatory. In the event of an emergency, your insurance policy will protect your property, but it won’t protect your tenants or their stuff. Plus, if one of your tenants is responsible for damage to someone else’s property or an injury inside your rental unit, you could be on the hook…unless they have their own liability insurance. Consider recommending that each of your renters purchase their own tenant insurance to prevent potential disputes or liability suits. You may want to ask for proof of insurance before they move in, and check that they’ve renewed their policy each year.
- Put your rental agreement in writing. Before your tenant moves in, consider having them sign an agreement that outlines the terms of the rental to help prevent disagreements down the road. Rental agreements often include things like the names of the landlord and tenant, the address of the rental property, the amount to be paid each month, a description of utilities and other fees that are included or excluded from the monthly rent, the process for handling repairs and maintenance, and the duration of the rental agreement. If you need help drafting your rental agreement, you may want to consult a lawyer.
- Decide how you want to be paid each month. Before your tenants move in, agree on how they will pay rent. Will you require a physical rent cheque on the first of the month? Will you accept e-transfers directly to your bank account? You may want to avoid cash payments so you don’t have to carry a large amount of money to the bank each month.
- Plan for pets. In some locations (like Ontario, for example) it’s illegal for a landlord to evict a tenant for bringing a pet into a rented space, even if there’s a “no pets” rule in the rental agreement — so learn about your local and provincial laws, and if you have concerns about animals, ask potential tenants if they have pets before agreeing to let them rent your space. While many pets are house-trained and won’t do any damage indoors, be prepared to give your rental space a little extra TLC when a pet-loving tenant moves out.Note: If you’re renting out a condo and the condo corporation says pets aren’t welcome on the property, you’ll need to explain this to your tenants and include it in your rental agreement.
- Sound the alarms. When getting your rental property ready to rent out, make sure you install adequate smoke and carbon monoxide detectors. Provide your tenants with care instructions (like testing the smoke detector once a month, for example) and extra batteries.
- Keep up with the upkeep. When new tenants move in, advise them to let you know immediately if anything goes wrong, no matter how minor. Not only does keeping the property well-maintained help minimize the chances of a bigger problem down the road, but it also gives your tenants a sense of pride in their home — so they’re more likely to respect and take care of the space.
Ready to insure your rental property? Contact your licensed broker today.