Renting out a basement unit


Dear David,

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,, 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.