There are a lot of reasons why someone might choose to become a landlord in Calgary. Perhaps, it’s the extra income, the tax benefits, or the enjoyment of the lifestyle. Regardless of the reason, if becoming a landlord is something you’re thinking about, there are a few things you should know.
Being a Landlord is a Job, a Business
Being a landlord is more than sitting back and collecting rents on the property every month. Have a business plan and a budget for when appliances need to be replaced or emergency repairs are needed.
What’s the Right Property?
Should you buy a house, an apartment, or a duplex, or rent out a portion of your own home? There’s no right or wrong answer, but you must decide what’s best for you, your lifestyle, and what you’d like to get out of being a landlord. Some landlords choose to buy a duplex property. That way, if one side is empty while the unit is being upgraded, they can still collect rent from the other side.
Do you Know the Rules?
In Calgary, landlords and tenants must follow the Residential Tenancies Act (RTA). The RTA Handbook is available on alberta.ca and details the rights and responsibilities of everyone involved in renting residential properties. Knowing your expectations as a landlord and being able to communicate your expectations to future tenants is crucial to a long-lasting and positive landlord-tenant relationship.
Find the Right Tenants
Speaking of a great landlord-tenant relationship, this could be one of the biggest hurdles to becoming a landlord. Horror stories abound in regard to poor tenants and damaged property. Finding the right tenants could take some time, so be sure not to put yourself in a financial position where you need to get someone to sign that lease fast, no matter who it is. Hold credit checks and ask for references. Once you’ve found the perfect tenant, you’ll want to hold on to them because finding another amazing tenant may be harder than you’d like. Successful landlords go the extra mile to make sure their tenants know they’re more than a money mill to them. Being responsive to repair requests and purchasing solid equipment and appliances go a long way.
Make Sure Your Tenants Know You
Just as there are horror stories about tenants, the same is true about landlords. Your tenants should trust you to be aware of the house and the potential quirks that may arise. Not only that, but they should trust that you’ll hire only professionals to fix any maintenance issues. If you know that’s outside your own wheelhouse of skills, then prepare to develop your own network of handymen to ensure your property is in the best hands.
Should You Get a Property Manager?
Maybe owning a rental property is the best financial decision for you, but you just don’t have time for the hands-on attention it would require. Finding a well-respected property manager or management company in Calgary is a good option, but only if that manager reflects your values.
How to Calculate Rent?
The rental rate should not be an arbitrary number. One rule of thumb is to set rent between 0.8% and 1.1% of the value of the home. However, as house prices increase, you will price out many good tenants. Another option, of course, is to compare the rents of the properties around yours. However, to properly compare, ensure that you’re comparing houses similar to yours and what you’re offering. Ultimately, you want to make sure your expenses are covered.
As the Calgary rental market booms and the vacancy rate remains low, there is a growing demand for rental properties and well-informed landlords. Keeping abreast of standards while you start the path toward becoming a landlord will set you apart and will attract long-term, good tenants.
One of our specialized Calgary sales agents would be pleased to assist you in your rental property search or answer any further questions.
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