How to rent out your house
Renting out your own investment property or house can be an involved process and often requires a significant amount of time and effort invested. If you don’t have the time, it may be
more efficient to outsource managing your property to a professional property management company.
Property management companies usually charge a small percentage of your rent in return for their services.
If you decide to do it yourself, there are many aspects you need to take care of:
- Can you do it? The most important part in this process is that you must find the time to be a landlord, in many cases this involves investing some of your time on weekends or evenings to maintain the property and simply be available on top of what is involved in renting it out. You need to make sure that the zoning by laws and your mortgage (if you have any) allow you to rent out your home.
- Expenses: You will need to calculate the total expenses of keeping the property going, including mortgage payments, maintenance, utilities, repairs and any other related services such as property management, advertising the rental, accounting and legal expenses. You will also need to factor in the cost of damage and wear on the property appliances and furniture (in case of furnished rentals).
- Rent price: You will need to research what other comparable houses are asking for rent. Check out online rental websites like RentCompass to see what other apartments for rent or houses in the neighbourhood are advertised at.
- Net income: It is very important when making any investment decision to calculate the expected net income from that investment; otherwise it becomes a losing asset. Therefore it is important to make sure that the expected rent price is higher than the expenses you expect to spend on the house on annual basis and plan on hidden/unexpected expenses as well.
- Advertising: Once you decide on the rent price you will need to advertise your rental on rental websites, local newspapers and bulletin boards. Nowadays most people search online, so it is more effective to focus on listing your rental online on more than one website to get maximum exposure. You can post your ad for a fee on other websites or choose to post a free rental ad on free websites like RentCompass. You need to make sure that the website you are posting to is user friendly and is geared towards the kind of tenants you are seeking. For example, young professional tenants tend to be technology savvy, so a user friendly online service is important, and these days having a mobile rental search service or a social media integrated rental experience such as an app for finding rentals on Facebook are important factors to reach these professional tenants.
- Screening: One of the most time consuming and critical aspects is screening your tenants. It is very important that you like the tenant and feel that they would be taking good care of the property. It is also important to judge if the tenant will be able to financially afford the rent you are asking for. Usually credit checks can help you predict the financial stability when the tenant has a good credit history and it is worthwhile in the long run spending the fee to run such a check.
- Application: You need to have a rental application to be filled by prospective tenants. Again, it is recommended that you do a credit check on each eprospective tenant to make sure that they don’t have a history of not paying debt. It is important that you disclose the fact that you will perform a credit check and ask the prespective tenants to agree and sign this agreement. Ask for references and preferably previous landlords of the tenant and check with the references before you accept their application.
- Landlord and tenant laws: Be sure you understand your rights as a landlord and obligations towards your tenants, different provinces have different laws so it is important that you read on the laws specific to your province. Visit our Resources section to find information and laws related to your province.
- Good luck with your new adventure!