INCOME PROPERTY BASICS
You may be interested in the idea of buying a piece of property to generate an income from tenants. We are here to help you find the right property to invest in. Like everything else in real estate, this looks different for each buyer. Your target demographic for tenants, level of management you’re willing to put in, number of tenants, geographic area and more will affect the properties that suit your undertaking.
Investing in real estate can be a great way to make money or hold your wealth. Depending on how you want to play it, you may be looking for a property that generates a rental income month-to-month or you may simply want to break even on rent and sell your property at a gain when the market allows.
Whatever your goals are, there are factors that need to be thought-out. All investments come with a level of risk and knowing that is important when placing your wealth into any venture.
SOME FACTORS TO CONSIDER
COSTS
There are costs associated with managing a rental that should be considered before signing any agreements. Property taxes, capital gains tax when you sell, permits, cleaning costs, utilities, maintenance fund, contingency fund, any improvements that need to be made (either that you decide on or are required to complete by administrative bodies like those enforcing the Fire Code, property managers, and more depending on your situation.
MAINTENANCE
Ensuring that you maintain your property is of the utmost importance to maintaining the value of your property. While a number of factors affect the value of a property, doing what you can to make sure that it remains structurally sound and clean is vital.
TENANTS
Maintaining a good relationship with your tenants can be crucial for a positive investment experience. Proper screening before hand and a commitment to upholding your responsibilities as a landlord are a couple of best practices to carry out. For more information on Landlord and Tenant rights and responsibilities:
- Landlord Responsibilities
- Tenant Responsibilities
- Ontario Human Rights Commission Brochure for Landlords
LEGAL
Ensuring that your property is legal, follows zoning by-laws and that you adhere to the Residential Tenancies Act is the most important consideration when looking at income properties. The Residential Tenancies Act is administered by the Landlord Tenant Board and all disputes between landlords and tenants are to be submitted to them. They have issued a Standardized Residential Tenancy Agreement for all Ontario Landlords that must be used for residential tenancy agreements. The City of Kingston also now allows legal Secondary Residential Units to help support the need for housing in Kingston.
The city of Kingston also has a number of resources available for landlords.
PETS
A common question among landlords is the topic of pets. Except for circumstances where the rental unit is in a Condominium where the Condominium Corporation Declaration states that no pets are allowed, then a landlord is not legally able to enforce a “no pets” clause. Certain circumstances (allergies and reasonable enjoyment by other tenants) may allow a landlord to enforce a no pets clause but this must be approved by the Landlord and Tenant Board.