PROPERTY MANAGEMENT: Getting the most from your investment

Date Posted: 10/01/17

Every day, Canadians buy residential real estate for investment purposes. Often, these properties offer a stable rental income to cover most or all the expenses associated with the property, while providing a real estate asset that can appreciate in value. Of course, there will be many items that should be noted to ensure a successful experience. Here are some considerations to ensure you get the most from your rental investment:

The Importance of Tenant Retention

It’s always best to find a tenant and keep them. Nurturing longtermrelationships reduces turnover costs associated with clean up, marketing, superficial maintenance, and time management, while avoiding any gaps in revenue.

Know What Your Tenant Can Afford

The Canadian Mortgage and Housing Corporation recommends that a tenant spend a maximum of 30 percent of his or her earnings on rent. Spending 30 percent of household income on rent allows enough money to living and save for retirement or emergencies. Accepting tenants who spend under 30 percent of their income on rent will offer assurance that they can afford the unit.

Rent Deposits

A landlord can collect a rent deposit provided that they ask for it on or before the day the landlord and tenant enter the tenancy agreement. The rent deposit cannot be more than one month’s rent and it must be used for last month’s rent before the tenancy ends, and nothing else. One reason to take a rental deposit is to get a commitment from the tenant during the application process. Renters stop shopping once they’ve given a deposit but not alwayswhen they give an application. Tell prospective tenants that you will not return their deposit if they change their mind but that the deposit is fully refundable if their application is refused.

The Credit Check

The credit check is a tool most landlords use to access a tenant’s credit worthiness and decide if they can pay. A credit check not only provides a score, it reveals an applicant’s payment history and current employment status, while verifying the information on their application.

Keep in mind, there is much more to know. From identifying the characteristics of a good tenant to drafting a comprehensive tenancy agreement, and from chasing unpaid rent to keeping on top of repairs, a professional property manager can provide you with the peace of mind necessary to ensure a positive investment experience.

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