There has been a lot written about how buying a home is less expensive than renting one. Kitchener Waterloo has a very low vacancy rate, especially every year in September when thousands upon thousand of University students return for another year. Rents are high and the resale home market is stable and prices are growing currently at about 1% a year. Some sellers consider renting their home instead of selling it. After all, they can get great rental income now and perhaps as their house values slowly increase.
This logic makes sense. I believe strongly that residential real estate is a great investment. However, there is a huge difference between deciding you want to become an investor (and landlord) and deciding that renting your primary residence might be ‘easier’ than trying to sell it. As a real estate professional, it is my job to educate the homeowner to the possible challenges that might arise if they rent their home.
Here are some questions every potential landlord should consider:
10 Questions to Ask BEFORE Renting Your Home
1.) How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).
2.) Do you know the process in case a challenge does arise? Evicting a tenant can be a long and arduous process. I speak from experience.
3.) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?
4.) Will you allow pets? Cats? Dogs? How big a dog? Did you know that you’re not allowed to discriminate against animals?
5.) How will you actually collect the rent? By mail? In person?
6.) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?
7.) Do you have a list of craftspeople readily available to handle these repairs?
8.) How often will you do a physical inspection of the property?
9.) Will you alert your current neighbors that you are renting the house?
10.) Are you prepared to pay the fee to become a licensed landlord? Are you prepared for the process to have the city recognize your home as a rented dwelling?