Although the housing market has gotten back onto track and started its slow progression to recovery there are still many homes that are not selling as anticipated. In such situations, instead of letting your home linger on the market, renting it out can be the best alternative. Just think about being a reluctant landlord and plan for insuring your rental property. Our real estate lawyers suggest some helpful tips that can help you safeguard your property and yourself while exposing your home to the rental market.
How to Find a Good and Trustworthy Tenant
You can find tenants in local newspapers, through online ads or through word of mouth. It is important to get some basic information from all potential tenants, such as: their name, employer, salary and references. You also need their signed authorization in order to review their credit reports and criminal history; background checks are crucial to avoid any future problems. Alternatively, you can hire an agency who can provide you background checks of all prospective tenants. You could also conduct tenant screenings.
Determining the Rental Amount
You can get an idea of the rental rates of your area from the newspaper ads, online resources or from your neighbors who may already have tenants. Ideally, the rent should be lower than your monthly mortgage payment, but it should also be comparable to other properties with similar dimensions and amenities.
Using a Lease to Protect Your Rights
Make sure that you have a written lease insures that you and the tenant are aware of the rights and obligations of this new relationship. A good lease should include tenant and insurance laws of your province.
A lease must also contain the following elements:
- Lease term- Monthly leases provide more flexibility if you are still waiting for someone to buy your home. On the other hand, if you plan to hold onto the property, an annual lease is advisable.
- Security deposit – Usually first and last month’s rent paid in advance. Never agree to take partial payments.
- Rent due date
- Details of who will undertake the responsibility of repairs
- Routine maintenance responsibilities
- List of tenants living in your property
- Behavioral rules such as acceptable noise level, smoking prohibition etc.
- Rules and dues of homeowners association, if applicable to the tenant or not.
- Eviction terms and procedures- circumstances that authorize you to evict your tenant from your property, including inability to pay the rent or damages to the property etc.
Appropriate Property Insurance Coverage
It is crucial to protect your property with a suitable insurance policy. As a homeowner you need a home-owner’s policy providing coverage for structural damage, medical expenses, personal liability and all the chattels within the home. Additionally, as a landlord, you require rental property insurance.
Renters Insurance Is Crucial
Encourage your tenant(s) to buy renters insurance to safeguard their belongings. As the landlord this works in your favour too, because it reduces the chances of the tenant filling lawsuits against you for any damages to personal property.
Prior Preparations for Eviction
In some cases, when the tenant does not leave willingly, the landlord needs the assistance of an attorney to lawfully evict a tenant. It is wise to prepare for such unpleasant situations, however unlikely.
Contact a reliable real estate lawyer about legal fees and your liabilities.
We at Nanda have a team of professional real estate lawyers delivering precise legal guidance to people around Canada. We handle high-end real estate deals quickly and effectively. Contact us now to take advantage of our real estate services.
