PROTECT YOURSELF BEFORE RENTING YOUR PROPERTY

So how do you prevent a nightmare tenancy and ensure that you can live the income-property dream?

Educate yourself:

Do your research by visiting online resources such as LandlordSelfHelp.com, a government-funded agency website dedicated to educating the small landlord. “Learn what the human rights, fire safety, electric acts require you to follow,” says Susan Wankiewicz of the Landord’s Self-Help Centre.

Screen your tenants:

“A gut feeling and a handshake isn’t going to help you spot a problematic tenant,” says paralegal April Stewart. She suggests screening with the assumption all of the information a potential tenant provided on the rental application is false, and then proving it to be true. “Don’t assume that hiring a realtor will assist you with this,” Stewart adds. “No screening process is bulletproof . . . they’ll often take the first cheque that comes their way, so the onus is on you to ensure your realtor or other third party did a thorough job screening applicants.”

Photograph the unit before renting it:

While landlord law assumes a tenant will maintain the integrity of a unit, Stewart finds this isn’t always the case. “There are tenants who will damage property to avoid paying the rent, and without proof of the unit’s original condition, it’s a nightmare to prove otherwise,” she adds.

Declare the rental income:

By law, a landlord must declare the income received from an income property. One of the advantages to doing this is the ability to expense that portion’s use of utilities, maintenance fees and other costs, says Alan Posner, a Toronto-based accountant. “It’s not all rosy, especially when selling your home, since the portion of the property that’s an income property is subject to capital-gains tax,” he says.