There are different reasons for wanting to become a landlord. It could be to serve as an extra source of income or to help with your mortgage payments. Whichever reasons you have, there are steps you have to take to become a landlord in Canada.
But before becoming a landlord, you must have the mindset that being a landlord is as good as owning a business. It can be stressful if you have multiple tenants or just one really bad one. So, it would be best if you were prepared for all the challenges that come with it. This article will be reviewing how to become a landlord in Canada.
Steps to Becoming a landlord in Canada
Being a landlord is an excellent way to make a profit or extra money. Also, it is a long-term investment since your property will appreciate over time. Hence, it is a lucrative business if you take the proper steps.
The following are steps you should take if you want to become a landlord in Canada:
1. Buy the right property
You have to own a property before you can rent it out. So, you want to make sure you get the right type of property, especially if it is the only one you will own for a while. For instance, if you want to buy a house for yourself and have space to rent out; you should buy a big enough house and have extra space.
Also, you should consider the location of the property. As much as houses in popular spots are in high demand, you can make more money from a house in a less popular place. This is because house prices in such areas are lower so, you can buy for less and still rent it out at a similar price as houses in popular spots.
2. Be Familiar with Rental Laws in your Province or Territory
There are no general laws for rentals in Canada. Still, there are provincial and territorial rental laws. So, you should be familiar with them to know your duties and rights as a landlord in the province or territory. Knowing the law will give you the adequate information you need to avoid unnecessary legal issues.
3. Screen Potential Tenants
If there’s one thing that can mar your experience as a landlord, it has to be having a terrible tenant. Before you rent out your space to anyone, do a proper background check which includes credit checks.
In addition, request references from their employers or former landlords. Also, check to see if they have any disabilities to know if your property will be suitable for them or if you can make any adjustments to accommodate the disability.
4. Get Additional Insurance
You might need additional insurance if your policy doesn’t cover additional fees that accrue from having a tenant. Tenants in Canada are not legally required to get insurance.
5. Join a Landlords’ Association
Although joining a landlord’s association is an optional step, you are not legally required to join any association. However, they are helpful and resourceful in giving practical advice and, sometimes, legal backing in landlord-tenant issues.
In addition, you can also file applications for evictions through some of these associations. Other associations assist landlords and provide them with professional help. There is one in every province and territory in Canada.
Once you have ticked off all of these steps, you can go on to sign a rental contract (lease) with a suitable tenant. You should prepare the lease with the aid of a lawyer, and, of course, knowing the rental laws in your province or territory is a plus.
Now that you know how you can become a landlord in Canada, you should also know some of your duties and rights as a landlord. So what are the duties of a landlord in Canada?
Duties of a Landlord in Canada
As a landlord in Canada, the general rule is that you ensure that the unit you are renting out complies with the rules and regulations that apply to minimum standards for; health, safety, maintenance, and housing.
So, the unit must meet some requirements like:
- Municipal property standards
- Fire safety regulations
- Local building code
It is, of course, your duty that you meet these requirements. In addition, some of the other obligations expected of you as a landlord include;
- Maintenance of the rental unit in excellent condition with a good and stable supply of fuel, electricity, hot and cold water, and other utility services as required unless the tenant agrees to pay for the services by themselves.
- Non-interference in tenant’s private life with reasonable and acceptable standards of enjoyment of the property’s premises by the tenants, household members, or guests
- No obstructions, harassment, or coercion with the tenant
- Non-seizure of units for rent default or non-compliance except through a legal process
Nonetheless, you must comply with the Personal Information Protection Electronic Documents Act (PIPEDA) when dealing with your tenant’s personal information. Several other duties and requirements are dependent on your province or territory.
Rights of a Landlord
You certainly have your rights as a landlord in Canada, and some of them include;
- Rent deposit collection
You have the right to collect rent deposits from your tenants. That is a down payment of the rent you are charging.
- Rent collection
As much as you have the right to collect rent deposits, you also have the right to collect your rent in whole or instalmentally, as discussed by you and the tenant.
- Rent Increase
You can also increase the rent as a landlord in Canada but only after 12 months. That is, after one year of renting a house out, you can then increase the rent.
- Entry into the property
Also, you have the right to enter the property for purposes of repair and maintenance.
You can become a landlord in Canada by taking due steps such as buying the right property, knowing the laws, and screening potential tenants. Above all, ensure you have the mindset and mental strength to go through challenges that may arise from being a landlord. All in all, it is a great way to have an asset and make money.