To find out if you are really cut out to be a Landlord, ask yourself these five questions:
► Do you have the discipline to stick to a long-term plan?
► Are you a good communicator?
► Can you diffuse potentially volatile situations?
► Are you decisive?
► Can you deal with conflict?
Landlording can be hard work and it can be stressful, but if you're cut out to do the job, you will learn to take the bad with the good.
Many people don’t ever invest in rental properties because they hear stories about calls from panicked Tenants in the middle of the night. As the author of this article and the owner of ten rental properties, I can say that I’ve never received a call from a Tenant in the middle of the night. Not that I haven’t had my share of headaches, though.
When you first purchase a rental property, you will likely have to decide whether you will manage your rental property or hire a licensed Property Manager. It’s recommended, at least in the beginning, to manage the property yourself if you are able to. You will gain a huge amount of experience (and likely learn how to replace a toilet) which will help you later on in better managing a Property Manager.
Being a Landlord brings many legal and financial obligations. A Landlord must comply with governing bodies and health, safety and housing standards required by law. In addition, rental income is taxable and must be reported to the Canada Revenue Agency. Whether you rent out several apartments in a building or complex or simply your basement suite, you are in the business of being a Landlord and should approach landlording in a professional and business-like manner. The more you know about the law the better off you and your business will be.
If you do end up hiring a Property Manager, expect that your rental income will be reduced because of the fee they charge. On the other hand, a good Manager would take on a lot of the work and also the stress associated with managing a rental property.