There are many reasons why you might want to rent a tenant to live in your house.
You have plenty to spare and are interested in a side hustle.
Recent divorce proceedings or job loss have left you with little money.
You have moved into a larger home and now want to make a profit by renting out your property.
Although becoming a landlord is financially rewarding, renting your first home can be overwhelming. Without any previous experience, it can be daunting to rent your first house.
We will show you how to make sure your first rental experience is smooth. This article will cover how to market your house effectively, how you screen tenants, and other laws.
If you are the type that likes to get to the point, this guide has been condensed into this handy checklist you can download and reference as you need.
Let’s begin!
Step 1: Find out the laws that govern rentals in your area
The first thing you should do as a novice landlord is to research the laws applicable to rental properties. This will enable you to avoid a significant fine and possibly a lawsuit by your tenant.
The The rules and regulations governing rental properties differ between provinces and within each municipality. For more information, please visit the websites for your municipal and provincial governments.
Your Your home must adhere to the minimum housing standards set by local bylaws. To These laws will ensure that rental units are able to be occupied safely, and they have access to basic amenities like water and heating.
These laws usually include the following:
- Residential zoning requirements
- Building codes
- Fire codes
- Standards for electrical safety
- Safety and health standards
You may have to make some changes depending on the condition of your home.
If your property has been in excellent condition, understanding your rights as landlord is the next step. You should review the following topics:
- Rent rises – Every province has its own cap on the amount and frequency of your monthly rental fee.
- Tenant screening You must follow certain laws to screen and select tenants. It is not allowed to ask prospective tenants discriminatory or offensive questions.
- Repairs and maintenance – As a landlord, it is your responsibility to maintain your home in good repair. Tenants can often be given small tasks like checking the smoke alarm.
- Inspection report A property inspection report is an official document that attests to its condition when a tenant moves in and when they move away. Each province has its own rules regarding inspections.
- Tenant eviction – Every province has its own rules regarding when and how to remove tenants.
- Damage deposit Depending on the province, some provinces allow landlords for a damage deposit to be collected. Others prohibit this practice.
Step 2: Improve curb appeal of your home
Many people consider curb appeal a key aspect of renting. They want to feel at home in a peaceful and comfortable environment. A home that is not attractive and clean could cause a loss in quality tenants.
You can make your home more attractive to renters by making it more modern and vibrant. Here are some tips to enhance your home’s curb appeal.
- Wash all windows and doors
- Give the exterior a fresh coat
- Consider adding stylish lighting to the path leading to your front door
- Retain overgrown trees and plants
- Take out the weeds and cut the grass
- Replace worn down fencing
- Upgrading your front door
- Clear out all clutter in the back and front yards
- Make sure to clean the outside furniture
- Add more plants and flowers
Be sure to pay attention to the obvious issues before you do any fancy upgrades. Inspect your front and back yards before you make any costly upgrades. Look out for cracks, broken fence boards or chipped paint. It is best for exotic plants to be kept in their natural state.
Step 3: Sell your home
Once you have finished exterior beautification, it is time for it to be listed on a rental website so that it can attract interest from potential renters. This will require an informative and attractive advertisement.
You must first take high-quality, strategic photos. Your Your goal is to highlight the best aspects of each room in your home. Make sure you have everything in order before you start taking photos. This will make it easy to see the layout and structure of each room. Also, take pictures with bright light.
The second is to create a succinct summary of your property that includes all relevant information that potential tenants might be interested in. Here’s some information that you can include:
- Refer to the following: Square footage, number and types of bedrooms and bathrooms, appliances available, parking, type of kitchen countertop, etc.
- Nearby amenities– Close proximity to shopping malls, schools and public transportation hubs.
- Rent fees – Monthly rent price, security deposit details, discounts on rent, etc.
- Utilities Please list the utilities that your rent price covers.
- Restrictions Tenants must be aware of any important rules, including those pertaining to pets or smoking.
Once you have created an ad that you like, upload it with your contact details to the rental property listing website you choose.
Step 4: Receive inquiries from renters, and ask prescreening questions
After some time you should start to receive inquiries from potential tenants. These people should be contacted and interviewed to confirm their qualifications.
You can now start curating a shortlist of potential quality tenants (this stage also allows you to spot red flags in certain candidates).
Here are some questions to help you get started if you are unsure what to ask:
- What is your monthly income?
- When are you planning to move in?
- Why should you move out of your current house?
- How long have your lived in your current home?
- Do you own pets?
- What number of people will move in with you?
- Are you a smoker of cigarettes?
- Are you willing to consent to a background and credit investigation?
- Are you afraid of being evicted?
- Do you remember breaking a lease agreement?
- Would you be willing provide references from your past landlord and employer?
- Do you have the ability to pay the security deposit, first month’s rent and final payment before you move in?
- Do you have the time and commitment to sign a one year lease agreement?
You don’t have the right to ask any question you want. You cannot ask personal questions about the rights of someone or their private matters. It is against the law to ask personal questions about someone’s human rights. The Fair Housing Act, as well as the Human Rights Act for your locality, outline what you should and shouldn’t do in an interview.
You must treat every applicant with dignity and respect, and give them a fair chance to become your tenant.
Step 5 – Conduct viewings and provide rental applications
To determine if your property meets their requirements, preferences, and expectations, individuals interested in renting your home should visit it.
Arrange with each candidate the time and day for a viewing. Book all viewings the same day, and at least on weekends. This will enable you to finish your viewings quickly.
Make sure to tidy up before viewings. You can repair any damaged appliances and patch up holes in walls. Your Home should make a great first impression.
After each viewing, each candidate should be given a rental application to complete and return to you. These are the things you should ask for:
- Personal information (full names, addresses, dates of birth, contact details etc.
- Copy of government-issued identification
- References for employment
- Refer to past landlords
- Information on any other persons (and pets), who will be living in the property
- You must provide proof of income such as a pay stub, bank statement or letter from employment
Step 6: Accept rental applications and screen potential tenants
The key takeaway: Validate as many facts and data points as possible while you do your due diligence. If you have as many details as possible, you can make a more informed decision about the person you rent to.
After receiving completed rental applications, it is time to screen each applicant to assess their suitability for tenancy. This involves typically reviewing each applicant’s credit report, references, background, and criminal records.
Credit report
A credit report is a summary of an individual’s credit history. This includes the amount of debt they have, their payment patterns, and whether they have ever defaulted. Their credit score can be used to measure their financial creditworthiness.
You can assess the applicant’s ability for timely rent payments. This is the most crucial characteristic of a high-quality tenant.
Here are some details to look at in tenant’s credit reports:
Credit score Canada’s credit scores range from 300-900. A high credit score indicates that an applicant is responsible for managing their finances, and is able to pay on time. Low credit scores are a sign of the opposite.
Payment history Assess whether there are past due amounts, how far behind they are with payments and how often they make late payments.
Type of debt What kind of debt is the applicant carrying? Are you looking for high risk debt, such as payday loans and unsecured credit lines with steep interest rates. Are you looking for high-risk debt like student loans or unsecured credit lines that have steep interest rates?
Total debt amount Determine how much the applicant owes in debt and how much they are able to pay each month on their accounts.
Credit limits Check how much credit they have on credit cards and lines of credit and how liberally they use it. If they are prone to spending excessively, it could result in them not paying rent on-time.
Bankruptcies and consumer proposals. Accounts sent to collections Any of these negative items indicates that the applicant has had financial difficulties in the past, or is still recovering.
An applicant can submit their credit report directly to a third-party source, but it’s better to do so. The This is because individuals can easily alter or create fake documents.
SingleKey gives you a detailed and easy-to read credit report. It provides valuable financial information to help you screen tenants. Once you purchase your SingleKey credit report, it takes just five minutes for you to access it.
Background report
The background report of an applicant provides insight into their behaviour patterns and past crimes.
Based on the details of your report, you might uncover criminal records, news stories and past evictions that could convince you to accept the applicant.
You can also check their public social media profiles for insight into their personality as well as past education and employment. Reviewing their social media profiles can help you identify signs that a tenant might be problematic.
Refer to past landlords and employment references
It is important to reach out to the applicant’s past or current employer, as well as any previous landlords, for two reasons.
First, verify that the applicant is being honest about the information provided. Unfavorable details may be revealed that you did not know about.
The following questions are available for you to ask your employer:
- Are they employed by your company at the moment?
- What length of time have they been with your company?
- What is their monthly salary?
- Are they respectful and responsible?
Ask the applicant questions about their landlords in the past.
- Are they able to pay their rent on-time?
- Are they still owing you rent?
- What did they think of their neighbors?
- What damage did they do to the property?
- How clean was the property?
Step 7: Choose your tenant and have him sign the lease agreement
After you have thoroughly screened all applicants, select the one that meets your qualifications. Let the applicant know that you have accepted them as tenants and send them the lease agreement.
The Lease agreement is a legal document which outlines the rights of landlord and tenant. It is primarily governed by the laws in your jurisdiction. Each jurisdiction has its own guidelines regarding the scope of your lease agreement. You may also need to use a standard form depending on where you live.
These are the key terms that a lease agreement usually covers:
- Name of each tenant
- The Date the tenant(s), can move in
- Restriction on illegal activities
- Lease length
- Monthly rental fee
- Acceptable rent payment methods
- Services and utilities included with the monthly rent
- Deposit security
- Repairs and maintenance
- Notice requirements for entry to the property
- Restrictions on tenant modifications to the property
- Pets
- Use of cannabis and smoking
- Subleasing
- Parking
Make sure you clarify the terms and answer any questions. Send them copies of the signed contract.
Step 8: Collect the damage deposits and the first month’s rent
The Next, collect the tenant’s damage deposit as well as the first month’s rent. These rules are not the same as those in lease agreements.
Damage deposit, also known as security deposit, is used to cover costs you incur for repairs or replacements of property that is damaged or lost by your tenant. You can also use these funds to pay rent unpaid, cleaning costs, or other obligations that the tenant does not honor in their lease agreement. The The maximum damage deposit you’re allowed to charge is one-month rent
You cannot legally require tenants to deposit a damage deposit in some provinces like Ontario or Quebec.
You can ask your tenant to pay a deposit for rent in Ontario (usually called last month’s rent). These funds are only allowed to be used for unpaid rent, and not property damage. It is not allowed to ask for a tenant’s rent deposit or damage deposit.
The The first month’s rent is the amount your tenant pays before they move in and take ownership of your home. This is basically a prepayment.
Let’s say, for instance, you and your tenant sign a rental agreement on August 17 and the lease commences on September 1. The Monthly rent is $1200 In such a case, you would request $1,200 from the tenant and take the payment as an installment for September’s rent. The Next rent payment due October 1.
Step 9: Finish the move in inspection and select a date for possession
The Final step in renting your house is to conduct a move-in inspection with your tenant. You will assess the property’s condition and create a report. Canada’s rent property owners must perform a move-in inspection.
The This procedure, sometimes called a “walk through”, is designed to hold both you and your tenant responsible for the condition of the property and establish expectations for maintenance. The The tenant’s move-in inspection can show the extent of damage that occurred before they took possession of the property, and the duration of their lease. If there is any dispute over the property damage, it will show who needs to answer.
Every jurisdiction has its own rules regarding how and when to conduct a move in inspection. In Alberta, for example, there is a move in inspection.
It must be done one week prior to or after the tenant moves into their new home
It must be between 8 a.m. & 8 p.m.
Not possible to be scheduled on a holiday
In the best case scenario, the inspection should be scheduled the same day that the tenant takes possession.
To Preparing for the inspection, clear out your home of clutter and get rid of all your furniture. To capture the observations of the tenant, you may also take photos and videos.
The tenant can legally take possession of the property once the move-in inspection has been completed.
You should give the tenant the move-in checklist before you hand the keys over. It contains important information about the property, as well tips for basic maintenance. It is possible to give instructions on how you test certain devices, such as smoke alarms, or how to change the batteries if needed.
The It is important that the checklist confirms that they have a copy of the lease agreement. Also, note completion of the move in inspection. You should ensure that it contains your emergency contact information.
The checklist should be signed by the tenant. You can then sign it with your signature. As a backup, you can save the original document.
That’s it, you are officially a landlord!
Our Final Thoughts
You can see that renting your home is not an easy task, especially if you are just starting out. While you might see an increase in income, it is not easy to be a landlord. It takes a lot of work, perseverance, and diligence.
You should start by learning the steps of the rental process one step at a.m. This will help you avoid common pitfalls, such as being stuck with a terrible tenant.
