Everyone wants to own a rental property, but not everybody has experience doing the various landlord tasks. If you buy a property and decide to go it alone, you’ll learn on the fly, and some of the mistakes you make can be costly.
If you make a mistake when writing the contract, you could be locked into it for years at a time. One of the major advantages of partnering with a real estate consulting company is that they’ve been through it all, and they’ll help you steer clear of the pitfalls of renting.
Using a generic rental agreement may lack specific clauses that you need to clarify the terms of for both parties. Let’s take a look at some of the factors landlord property and rental management companies will consider when writing a rental lease agreement.
1. Collecting Each Party’s Information
This sounds like a basic step, and it is, but it’s very important! You need to know the name, phone number and email address of everyone living in your property. We will also have a record of this, but so should you.
Especially in an age where some tenants and landlords use Airbnb to rent out their rooms on the short-term rental market, you must have contact information for everyone authorized to live there. You probably don’t want your unit to be used primarily as an income-generating tool for the tenant, but maybe you don’t mind if they occasionally rent out their unit when they happen to be out of town for a while.
Whatever your preference, you should state that in the lease, too. If someone is found to be living in the unit whose name isn’t on the lease, you need to know.
2. Include Specifics About Your Property
Your property may have certain features which need to be factored into the contract. For example, maybe there’s a garage on the property or another form of storage like a shed, and you need to clarify if the tenants have access to it or not.
Perhaps access falls to the tenants on the ground floor, not those in the second storey or the basement. Which tenant can park in it if there’s a space available? Being upfront about these types of questions helps the rental process proceed smoothly for everyone.
When you have it set in writing clearly, nobody can dispute it, and you have recourse to fall back on should they make a complaint. Likewise, make a list of the appliances and furniture included with the rental, so the tenant can’t take them on their way out and claim they were theirs, or leave them in far worse condition than they found them.
If you write down or record any defects or damage reflected in your property into the lease, then you’ll remember what state it was in at the time your tenant signed on.
3. Determine a Payment Method
How would you like to collect the money? You can decide your preference and build it into the contract. Property Management Toronto offers a full suite of services for landlords, including rental collections.
You can also require tenants to pay you directly via auto-deposit, and some prefer post-dated cheques. It’s crucial to ensure that the tenant knows what’s in the contract and agrees to how the payment process will work.
4. Factor in Utilities and Services
The cost of utilities may vary widely depending on the age and state of the property. Newer homes with Green appliances, proper insulation, modern HVAC and double-pane windows will have lower bills than an old drafty home with electric heating.
If you just made major investments in your property to ensure it’s energy-efficient, you may consider building that into the cost of rent to recoup your money. Some older units don’t have a separate meter, and it’s simpler to bear the costs of utilities yourself.
You may decide to take a rough estimate of the monthly utilities and build that into the cost of rent, so your tenants don’t need to be bothered with paying hydro bills, but you’re not out any money.
5. Understand the Law
Tenants and landlords each have a set of laws and obligations they must follow, which is dictated by provincial law. Hiring rental companies in Toronto and the GTA for a turnkey solution means you can feel confident you’ll abide by the law without having to be a legal scholar.
Sometimes there are laws that everyone knows, such as landlords are responsible for things like cutting the grass and snow removal, not the tenants. But laws about things like eviction freezes, rent collection and more have changed at times during COVID-19.
If you need property management in Hamilton or the GTA that is familiar with the law and stays abreast of all the latest legal developments to ensure you’re always in full compliance, hire Property Management Toronto.
6. Make the Agreement After the Selection Process
Sometimes there are particulars that need to be ironed out after meeting the prospective and agreeing verbally to let them rent. Before that takes place, you’ll need to vet the candidates in a tenant selection plan that is streamlined and fair.
Property Management TO has a comprehensive screening process so that you find an A+ tenant quickly. The last thing you want is a nightmare tenant who doesn’t pay rent on time or at all or doesn’t treat the property with respect.
By the time you’re ready to create the rental lease and get it signed, you’ll have a wonderful tenant ready to live under your roof. Before you sign on the dotted line, just make sure there are no extenuating particularities to go over pertaining to that particular tenant.
Being a landlord involves risk, capital, and knowing how to navigate ever-changing legislation. Before you embark on this journey and lock yourself into long-term tenants, get help from the leaders in property management in Mississauga and the entire GTA. Our turnkey solution will make life easier for you and your tenants.