TENANTS: tips for real estate investors
- Follow the law! Get acquainted with Landlord Tenant Law in Alberta. The laws are there for a reason, and while they can involve some challenges, the sooner you accept that the rules apply the better. When the rules are bent, expect problems! There are many stories out there of tenants accepting a "move-out early" package to leave a sold property earlier than their 90-day notice (on a month-to-month agreement), then deciding to stay the full 90 days with nothing the landlord can do about it. If you follow the rules you'll have much less grief!
- Treat your tenants like customers. It seems that so many tenant-landlord relationships are fraught with mistrust and negativity. Remember the tenants are paying your mortgage for you, and are just like any other paying customer. Treat them with respect and you will most likely get respect back. As a tenant, do let your landlord know if something is wrong! Don't be shy if your taps are leaking or your toilet seems wonky... what starts as a little nuisance can turn into a huge expense for the landlord - they'll appreciate you keeping them in the loop!
- Create smart agreements. If you are thinking of selling in a year's time, sign a fixed-term one-year lease. Create clear guidelines and boundaries in writing from the beginning. Just hoping your tenants' friends don't move their boa constrictor into your property isn't nearly as good as having a strict no pets policy in writing as part of your agreement. And yes, I have seen a rental property with boa constrictor (living directly on the bedroom carpet with a mesh cage overtop)!
- Be prepared for wear and tear. If you want good tenants, don't just take the first tenants who come along. Be clear about who can live in the property. Remember, tenants will cause wear and tear on your property, just as you would if you lived there. There are many good tenants out there who truly treat their home as their own, but we all know the bad stories too. Pets cause extra wear and tear - be sure you are prepared for the added cost of fixing up a property after pets have lived in it - a big dog for example will likely have a significant impact on a home, especially the yard, the carpet, and the smell of the property! Strong food smells and cigarette smells are two other added wear and tear items to consider. Make sure you require your tenants to use ventilation - hood fans for cooking and bathroom vents for bathrooms (and yes, make sure they are in good condition - which brings me to my last point).
- Do some maintenance. Yep, really. Show up every once in a while to make sure your furnace filter is cleaned, your eaves troughs are cleared and your property is not the neighborhood eyesore. This will help avoid problems, maintain your value, and make happy neighbours!
There's lots more to know, and by no means is this a comprehensive list (or legal advice for that matter!). I have helped many owners sell properties with tenants with great success, and purchase revenue properties. Join a local organization or read as much as you can about being a landlord. So many new real estate investors are shocked at the challenges of being a landlord - if it was easy everyone would do it!
Buying or Selling? I can help!
Direct: (780) 710-7669