We’ve lived in the same house for 20 years and raised our family there. When both of our kids moved out last year, we started looking for a way to supplement our retirement and have someone keep an eye on things when we are traveling. We turned our basement into a legal one-bedroom apartment suite with its own entrance, and got the proper permits to ensure the tenant has parking. How do we go about renting it out? – UNSURE
DEAR UNSURE: It sounds like you’ve made great strides towards securing some passive retirement income. With the shortage of available rental units in Ontario (and across Canada for that matter), it certainly is a great opportunity.
I’m glad to hear you’ve gone through the process of securing the proper permits and approvals. By working though these channels, you’ve ensured your zoning can support a rental unit and that you’ve followed the applicable regulations. The process of getting approval from the city, quotes from contractors, and completing a construction project is onerous, but jumping through these hoops ensures your basement is safe and legal to rent to someone looking for a home. Before you actually rent out the unit, I suggest you familiarize yourself with the Residential Tenancies Act (RTA, 2006), which spells out the renter’s rights as a tenant and your obligations as a landlord.
If reading the RTA makes you nervous about renting, you can always explore Airbnb options, which offer short-term commitments and the ability to end the tenancy on practically a moment’s notice. Airbnb isn’t the “set it and forget it” type arrangement you’ve envisioned, but it may provide an opportunity to test out the landlord/tenant dynamic, if your zoning allows for it.
Signing a lease can bind you into a long term relationship, so it’s really important to find a tenant who’s a good fit. When interviewing applicants, I start by asking for a completed rental application with references, a credit score report with full credit history, a letter of employment, and pay stubs. It sounds like a lot, but this isn’t the time for shortcuts. The singular most important factor in your success as a landlord is vetting prospective tenants, and it’s worth letting the unit sit vacant for a month (if necessary) while you review applications. Signing a lease with a problematic tenant is like a bad marriage, only worse, since the RTA doesn’t allow many options for landlords.
Finally, before anyone moves into your newly renovated basement, I recommend hiring a professional real estate photographer to take photos and/or do a virtual tour while the unit is still fresh. Attracting a great tenant now (or in the future) will be easier when you have the right marketing tools at your disposal, and you can use this media now – and later.
PRO TIP: Wondering what to charge for rent? If you’re not working with a Realtor, Realtor.ca, Facebook Marketplace and Kijiji can give you a general idea of what market rents are like for similar units in your area. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.