(NC) – Renting out a room in your home, a basement apartment or purchasing an investment property can be an appealing way to help with the mortgage, utilize extra space or make a real estate investment.
According to Phil Dorner, president of the Ontario Real Estate Association, beyond the additional income, a rental property can be a valuable asset to your investment portfolio, as well as useful for family needs (including housing an aging relative or perhaps as a home for college-aged children close to campus).
“While there are clear benefits, before you consider becoming a landlord, make sure that you have a good grasp of what getting into the rental property business really entails,” says Dorner.
Here are a few tips for prospective landlords to get started:
• Read the Residential Tenancies Act: Know your rights and responsibilities as a landlord. Understanding the Act will help protect you as a landlord and also provide clarity on the roles and responsibilities between landlord and tenant.
• Screen tenants: Choose tenants carefully. Make sure that you have prospective tenants fill out an application. Be sure to check references and carry out a credit check through a credit bureau.
• Talk to your insurance company: Notify your home insurance company to avoid liability.
• Ensure your rental suite is legal: Make sure your suite complies with municipal bylaws. If the suite is not up to standards, you will not be able to get insurance.
• Learn from other landlords: Do your research and talk to successful landlords who can provide precedent. Tapping into the expertise of successful and experienced landlords is invaluable for first timers.
Understand the responsibility and time commitment necessary in being a landlord and, if you are considering renting out a room in your home, make sure that you are comfortable making concessions in terms of your personal space and privacy.
If you are planning on purchasing an investment property, speak to your Realtor about your goals so that you can be sure that the property you choose is appropriately situated, outfitted and conducive to attracting high quality tenants.
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Susan
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