Finding Success with Your First Condo Rental
Inherited some property? Perhaps you received big promotion at work and have a bit of extra cash? Or maybe you just feel like you’ve got too much free time on your hands?
Whatever the reason, you’ve decided to dip your toe into the wide world of condo rentals. Congratulations! Renting out a condo is certainly not for the faint-of-heart, but if you’re armed with the proper knowledge going in, you’ll have a much less stressful experience. Luckily enough, you’ve come to the right blog, because this week, we’re going over tips for first-time property owners renting out their condo space.
Keep on Top of Expenses
If you’re renting out your property, chances are, you’re looking to make a couple of bucks while doing so. This brings us to the first thing worth considering: will you make enough money in rental income to offset the fees and expenses that come along with the territory?
Some folks find that when they break down the numbers, it actually doesn’t make sense to rent out their property, and that there are other options which will provide a far better return than renting. This might seem counter-intuitive, but renting has the potential to be an expensive proposition for the owner, particularly in the beginning.
Some of this is from the up-front fees that are necessary when working with a property management company to find a tenant. Gone are the days when you could just put up a “For Rent” sign in the window and expect people to come a’knockin’. There is advertising and marketing to consider when renting your condo and the empty property should still be visited on a semi-regular basis to ensure such things as keeping the heat on and making sure the pipes don’t freeze in the winter to keeping the property maintained until a renter is found.
Compound these initial fees with charges for regular inspections, additional sets of keys, potential emergency responses (which can often be more expensive during the off-hours of the day), and renting can all of a sudden become a costly affair!
This doesn’t mean there isn’t the opportunity to turn a bit of a profit – if there wasn’t, nobody would be renting their condos out – but it does mean that it’s important to enter the rental market in a stable financial position with some cash reserves available so that you’re able to take care of situations and fees as they arise. Renting your condo can definitely earn you a few bucks, but you’ll want to be prepared before you list.
Responsibilities as An Owner
Even though you won’t be living in your unit anymore, there are still a lot of responsibilities that fall on you as the condo owner that you’ll need to be aware of. Here are some of the bigger ones:
- Tenant Undertaking
Many condo boards and property management companies are now requiring tenant undertaking forms to be signed by anybody living in the building as a renter. These forms bind renters to abide by the bylaws, policies, and rules & regulations (distinct from bylaws) of the condo. These forms outline all the ways tenants are expected to behave as part of the community, including details about amenity usage and more. As the owner, it’s your job to make sure these tenant undertaking forms are signed and upheld.
Just because your condo building is pet-friendly doesn’t mean there aren’t regulations surrounding the ownership of animals that need to be adhered to. As the condo owner, it falls to you to ensure your tenant is abiding by these rules. Some buildings don’t allow pets in certain areas, and damages caused by animals are usually charged back to the owner of the unit (not the tenant who owns the offending dog or cat). Be sure your renter can be trusted to keep Fido on a short leash – both figuratively, and literally, if necessary!
- Damage Deposits
It’s not uncommon for condo boards to require damage deposits for units that are being rented out, and it’s up to you to find out how much they need, and to ensure they get it. To avoid any unexpected surprises, take a moment to dig into the rules and regulations of your building before having that new tenant move in. Defaulting on the damage deposit can often result in a hefty fine that you, the owner, would then be responsible for paying.
- Condo Fees are Not Optional
The responsibility of covering the condo fees for your building falls to you, the condo owner. If you default on paying your condo fees, your board is within their right to request rent payment from your tenant to pay the cost of your fees. Don’t let this happen – make sure you cover your fees every month.
We mentioned that owners have an enormous responsibility when they decide “I want to rent my condo,” and that even extends to parking! These situations can often be mediated by the property management company, but it’s up to you as an owner to ensure your tenant is parking in the proper designated space and even to deal with issues such as your tenant parking too close to other vehicles or taking up too many stalls.
Consider Your Owner Responsibilities
When we said there were responsibilities for condo owners to consider before renting, we weren’t joking! That said, condo renting isn’t anything that you should be intimidated by. Educate yourself, know your responsibilities, and before you know it, you’ll be off to the races. Take the time to apply the knowledge you’ve learned here and renting your condo should result in all of your costs being covered, plus a few extra bucks in your pocket to boot. If you want to learn more about renting your unit, pick up the phone and call Catalyst Condo Management Ltd today – we’re always ready to chat with owners about what they need to consider when it comes to condo rentals, and couldn’t be happier to help steer any prospective first-time renters straight!