How to get the most out of your rental properties
And by most, we mean the most $$$ you can possibly earn as an Ontario landlord
With real estate prices in big Ontario cities soaring past all forecasts, it may seem like all you need to do in order to maximize the profits from your rental property is to, well, keep the place rented. But even with rents and property values steadily climbing, there are clever ways to get the utmost out of your rentals. Here’s how to make sure your role as a landlord remains a fulfilling – and ultimately profitable – one.
Do your research before purchasing rental property. Whether you’re considering investing in a multi-unit building or simply renting out your spare room, investigate the rental market and the vacancy rates in the neighbourhood. Consider buying near amenities that are particularly important to renters, such as public transit, restaurants, entertainment and grocery stores.
Vacancies are the bane of any landlord’s existence, and they are quite costly, meaning that a landlord’s job is not only to get a quality tenant in their unit but to keep that quality tenant happy. Providing small perks, like free Wi-Fi, or even substantial ones, like offering them a parking spot which may otherwise not be included especially in places like downtown Toronto.
If you’re having any difficulty at all renting your property (for example, some homes have an unusual layout, a unit may need a cosmetic refresh etc.) keep a list of everyone who has viewed the property. That way, you will be able to contact people who showed interest and inform them of any changes, such as building improvements or price reductions. You can also send a quick email and ask them what turned them off from the property. You can also upload a video of your property’s interior and exterior to YouTube and link it to your online ads. Be sure to discuss its unique features and explain who it would appeal to (the attic loft may have a sloped roof, but it makes a perfect home office or family room).
Look at Competition
How does your rent measure up against the competition? When a tenant gives notice, evaluate what similar properties are now renting for; the difference may be substantial if your neighbourhood has since undergone a transformation, or if you have carried out significant renovations. While you may have initially charged an appealing rent to attract prospective tenants and generate cash quickly, you may be able to get more now.
Who does the maintenance on your unit(s)? Consider learning how to DIY for minor repairs and fixes; when you do need to call in a professional, ask about preferred rates for landlords who will be referring a steady stream of business.
You may think of the CRA with dread, but consider that the taxman actually has very good news for you if you’re a landlord. Did you know that a host of common rental property expenses, from property advertising to utilities to Ontario landlord insurance, are all tax-deductible? Make sure you’re taking advantage of all you’re entitled to.
Renovate & Look for Subsidies
Renovating your property may seem like a money-burning proposition, but the opposite is true: as a landlord you’ll receive tax breaks for your upgrades, you can get further government incentives for ‘going green’ when it comes to energy-efficient improvements, and best of all you can get higher rents for a property that is renovated – especially if you focus on high-return areas like the kitchen and bathrooms. When it comes time to sell, buyers will also appreciate a well-maintained property.
Clean, don’t replace. It doesn’t take a complete overhaul to make a rental unit look inviting and liveable. Say your tenant leaves scuffed walls and stained carpeting behind. Before you automatically add a new coat of paint, try a Magic Eraser to remove scuffs; some longer-term tenants will want to do their own painting, anyway. Instead of ripping up the carpet and changing the flooring, which is very pricey, consider a professional steam cleaning – which will likely restore your carpets to the way they originally looked, for a fraction of the price.
Getting the most out of your rental property is important, but as a landlord, you still need the peace of mind that rental property insurance in Ontario brings. Contact us for a landlord insurance quote and get the best coverage for your rental at the best prices.