Buying a condo to rent out is an excellent way to invest your money while bringing in a steady, passive income. 2022 is poised to be the best year for property rentals, and you could be raking in cash – but you need to know a few things first.
Being a landlord is a great business idea, but just like all new businesses, it takes time to launch successfully. Draw up a rental plan and make sure that you stick to it over the next few years. The idea is to make the most money possible by doing the least work.
As a new landlord, here are five legal things that you need to know before you can rent out your condo:
- Check With The HOA
Some building homeowner’s associations (HOA’s) do not allow rentals in certain buildings. That means that the owner has to occupy the space, or no one does. That may seem like a strict rule, but it works best for buildings that have elderly people occupying the spaces.
Homeowners look after their properties and tend to be better overall neighbors because their living situation is more permanent.
- Tenant Approval
Some building HOA’s require tenant approval before a new tenant can move in. The best way around this is to make sure that you only allow the best tenants to apply. These tenants should have good credit records, excellent references, and be clean and tidy people.
You are more likely to get tenant approval from the HOA if your tenants are model citizens. It makes sense to want to rent out to only the best people, which keeps the building and other tenants safe and happy. That is as important as insuring your property is.
- Maintenance Requirements
Your rental properties have to be safe spaces for your tenants to live. Before renting your condo out, ensure that everything is up-to-code and in working order. Test carbon monoxide detectors and replace the batteries in the smoke detectors.
Clear all vents of dirt and debris and make sure any issues are immediately fixed. Consider using condominium property management companies in Etobicoke – they will handle any maintenance requirements on your condos.
- It’s A Business
Renting your condo out should be approached the same way as any other business- after all, being a landlord is a business. You are responsible for your tenant’s behaviour, so you must be aware of the legalities involved in renting out your condos.
Follow a strict screening process, much like you would if you were hiring a new employee. That is a tried and tested method for weeding out bad tenants who will only cause trouble for you.
- Rental Applications
Rental applications are a legal requirement to gather information about your prospective tenants, such as name, current address, the reason for moving, income, and other necessary elements. To conduct criminal and credit checks on prospective renters, you must first acquire their written permission.
The reason for this can be tax-related, and it will protect you if your tenants do anything illegal. It is always better to be safe rather than sorry.