Our Tips for new Landords
Here I have compiled a few of my favorite tips that I often give to new landlords that I have learned in my experiences of being a landlord. Note that these are only suggestions, you are 100% free to bend or ignore anything that you may disagree with.
1. Collection Rent Should be your Top Priority
Collecting rent is the most important part. Without rent, it kind of defeats the purpose. You should always collect the rent on time. Soon as you let allow the tenant to pay rent late, they may keep trying to pay late rent, and that’ll be a headache. One way to prevent this is to have a late fee (make sure this is stated in the lease).
2. Extra Revenue Streams
How can you generate extra revenue streams from 1 property? If you have a house, can you rent out the basement and upstairs separately? How about a detached garage in the back? A landlord in Calgary AB I know did this. He bought a house in the South East and renovated it so it had a proper basement suite. He rented out the basement, upstairs and even the garage in the back all separately.
Do you have an apartment in a busy or important area of town? Many downtown apartments in Vancouver BC will rent out the parking space separately for anywhere from $100 – $150 a month!
3. Don't Allow Pets
I love pets, and I take very good care of my pets but not everyone does. Pets can be very destructive with improper care. A male cat in heat will spray (and it’s nasty) and some dogs love to chew on everything!
BUT If you are having a hard time finding the right tenant, you may consider allowing a smaller pet (under 20lbs for example). Landlords in Vancouver will usually charge an extra 1/2 months pet damage deposit, and some places may even charge an extra $50/month per pet!
4. Keep Records
This is probably my biggest weakness as a landlord. I can never seem to find my signed leases a year down the road, or I forget how much the tenant paid for a damage deposit ages ago and have to dig through my records. Or how about those expense receipts from when you had to place an appliance or had to repaint.
This is where you’ll want to use software like Log My Properties (when it’s released) to properly track all your rental properties and documents.
5. Screen Tenants Properly
Finding the right Tenant that will take care of your property and pay their rent on time is a big deal. You should always do your duediligents and find out as much as you can. First, make sure they have a job, how else will they pay the rent (unless it’s a student and their parents are paying). Also do a credit check if you can. Ask to contact their previous landlord to see how things went with their previous home.
6. Do Your Walkthroughs
Before the tenant moves in, do a walkthrough with them and have a walkthrough list for them to sign off on any previous damages. When the tenant moves out, do the walkthrough again. With the initial walkthrough signed, the tenant can’t pretend any new damages were already there before they moved in.
7. Require Tenants to have Rental Insurance
You should always require your tenants to have rental insurance. What happens if your tenant does more damage than the security damage can cover? Your own insurance may not cover it all but compensation can be found through tenant’s liability coverage. Make sure to get proof of insurance.
8. No Family or Friends
Renting to family or friends is one major mistake many lands end up making. Many times, you’ll be forced to make the choice of getting screwed or keeping the relationship. They are more likely to try and bend the rules (not always). It’s just not worth losing the relationship/friendship over. Just say no to renting to family and friends.
9. Don't Always Raise the Rent
Crazy talk right? Many landlords love to raise the rent every year, and many try to raise it more than they are allowed. I had my rent raised by 9% one year in Surrey. I’m sure I could’ve fought back but we were planning on moving soonish anyways.
With my rental property in Lethbridge, I had really good tenants renting out the basement suite. They took great care of the place, always offered to help, even cleaned out the garden and all the weeds around the house. I’d much rather keep good tenants, than taking the chance of them moving out because I wanted to raise the rent and a make a little bit more money. Good tenants are hard to find.
10. Have a Written Rental Agreement
A written rental agreement is the best way to communicate your expectations and protect yourself.
A rental agreement should be fairly detailed. Things like, are pets allowed, late fees, yard maintenance or sidewalk snow clearing, or a noise curfew.
You can usually find examples of a good rental agreement on your local provincial/state websites. Here’s an example for British Columbia.
Managing your rental properties should be treated like a business if you want to be successful. Hopefully, these tips gave you a better insight on being a good landlord.
Do you have any good tips that we may have missed? I’d love to read them in the comments below.