Tips on Renting Out Your House in Ottawa
With rental rates on the rise, you might be thinking about stepping into the rental market. At first glance, it may seem like a guaranteed way to earn some extra income. But there’s a lot more to being a landlord than just owning the house. Between bylaws, maintenance and finding tenants, renting out a home is a lot of responsibility. Here are our eight best tips for renting out your house in Ottawa so you can have a successful experience.
1. Make Sure You Are Prepared to Be a Landlord
Before taking the plunge into the rental market, you should first consider if you are fully prepared to be a landlord. Do you have the necessary time, skills, resources and financial security to handle a second property?
You’ll have to manage the repairs and maintenance of two homes and you often won’t have the luxury of waiting when a tenant requests a repair. You’ll also have to screen tenants, collect rent and perform periodic property checks to ensure your investment is being properly cared for. Even if you hire out the physical work, you still need the time and resources to manage the contractors.
2. Can You Cover the Costs of Renting out Your Home?
With housing prices at an all-time high, chances are rental income alone won’t cover all the expenses on a rental property. And even though renting out your home may not provide immediate cash flow; it can lead to future wealth and financial stability. If you’re planning to invest in an income property, you may want to consider increasing your down payment to help reduce monthly costs.
Aside from your mortgage, property taxes and insurance, you’ll also have to budget for repairs, maintenance and upgrades. You should also be prepared for an extended vacancy. Would you be able to cover the mortgage and expenses if no rent were coming in for a few months?
3. Understand the City of Ottawa Rental Bylaws
New Rental Housing Property Management By-laws came into effect in August 2021. These new bylaws require landlords to have clear systems and procedures in place for dealing with tenant needs. This includes having a comprehensive tenant information package, a system and record for handling tenant service requests, maintaining a tenant support registry and implementing a pest management plan. To learn more about the bylaws, download the City of Ottawa’s Rental Housing Property Management By-law Guide for Landlords.
4. Vet Tenants Carefully When Renting out your Home in Ottawa
Finding a great tenant is every landlord’s dream. Someone who cares for the property, doesn’t make unreasonable requests, and always pays on time can make all the difference in a successful rental experience. A thorough vetting process is the best way to find the right tenant and save yourself from costly damages or loss of income.
A comprehensive rental application is key to weeding out problem tenants. You’ll want to verify each candidate’s employment history, rental history, if they have a criminal record and that they have good credit. It’s important to be diligent and call each reference listed as well as performing online searches and an official credit check.
5. Handling Service Requests
Once you have tenants in place, one of the biggest jobs you’ll have as a landlord is handling requests for repairs, maintenance and supplies. Implementing a system for handling these requests will help ensure things run smoothly.
Consider how you handle urgent requests for important repairs such as a broken furnace or toilet. Establish a list of reliable and trustworthy professionals that you can call on in the event of an emergency repair.
6. A Written Lease is a Must When Renting Out Your Home
A lease ensures both you and the tenant are clear on your rights and responsibilities. Ontario has a standard lease that must be used when renting a residential unit. The standard lease outlines the terms of the rental including rent, utilities, repairs and maintenance, deposits, smoking, subletting, and changes to the unit. There is also a section for additional terms where the landlord and tenant can agree to any terms that are specific to the unit.
7. Ensure You Have the Proper Insurance
Homeowner’s insurance for a property you live in and a rental property are not the same. Landlord insurance protects property owners from financial losses on rental properties. It usually includes coverage for the building, any contents on the property that you own, liability arising from ownership of the property, and loss of rental income.
8. Should You Hire A Property Manager?
Managing a rental property can take up a lot of your personal time and require you to deal with issues you may not be comfortable with. Hiring a property management company can help alleviate some of the stress associated with renting out your home.
Property managers can handle tasks such as advertising for and screening new tenants, collecting rent, handling repairs and maintenance, and dealing with evictions. If you have more than one property or you don’t live near the rental location, a property manager becomes even more worthwhile. The average cost of a property manager is 6-9% of gross monthly rent plus additional costs when repairs are required.
Being a landlord can be challenging, especially if you’re new to the process. From finding the right place to pricing your property to securing tenants, there is a lot to know. Our team of Ottawa Realtors® has significant experience in the local rental market and can help guide you every step of the way. Contact us today to discuss renting out your home in Ottawa.