You’ve finally done it. They say that there’s no investment quite as sound as real estate, and you’ve taken that to heart. Just like a show on the local home and garden TV network, you’ve gone condo hunting, weighed the pros and cons, and signed on the dotted line to purchase a second condo unit strictly for the purposes of renting out and generating some extra income. Congrats! This is a huge step, and one that you should most certainly take a moment to celebrate and enjoy. Go on – pop a bottle, throw a little party! We’ll wait.
All wrapped up? Awesome. Now, it’s time to get to down to business. Even as a first-time renter, there’s probably plenty of info and bits of advice you’ve picked up that have helped you get to this point. However, that being said, it sure is easy to make a seemingly-small misstep along the way that could come back to bite you with serious consequences in the not-so-distant future. As a condo management company, we’ve seen a thing or two when it comes to the renting experience – both triumphs, and foibles. Let us steer you straight and help you make all the right decisions so that your first-time experience as a renter can be as painless (or near-painless!) as possible.
We know, we know. We can hear you groaning from here. Getting a lease…what a hassle! We’ve heard all the reasons that people feel like they can forego the “formality” of having a tenant sign a lease: we know the person, they seem really nice, they’re a friend of a friend, they made a great first impression, we got a good feeling about them, etcetera, etcetera, etcetera. In in our experience, though, no matter the connection you have with a tenant or the “gut feeling” you get from them, not having formal leasing paperwork signed up front almost always leads to trouble. And honestly, this makes sense.
It’s tough to be a good tenant. It takes effort. You need to have your life pretty well sorted-out in nearly all regards. Holding a stable job and bringing in a steady and sufficient income are part of it, but it also takes a certain level of responsibility to be able to properly care for and steward somebody’s property. That’s where a lease comes in.
By having your tenant sign a lease, you have recourse if things start to go sideways. If rent comes late, the property incurs damage, or any other agreements are broken, the next steps forward are all there, in black-and-white. Not only that, but signing a lease is in a tenant’s best interest, too, as it stipulates crucial details like rent payments and due dates, maintenance and repair responsibilities, additional fee structures (late rent, pet deposit, key deposit), subletting information, damage deposit particulars, and more. A fair and proper lease allows both renter and tenant to hold one another accountable to each other and is the foundation of communication between these two parties. Don’t skip out on the important step – get a lease!
Now that we’ve got all those lease-related details out of the way, you’re off to the races! The next step is to get your new tenant properly settled into the condo community. There’s a bit of a process here, but the first thing you’ll want to do is update your tenant undertaking. This essentially informs your condo corporation that you, the owner, will be living offsite, and that the unit will be occupied by your vetted tenant.
From there, you maintain a responsibility to catch your tenant up on the policies and rules of the building. This is an important step in the renting process. Not only does having your tenant be in-the-know keep stress levels down for owners and occupants alike, but it will keep your tenant from unknowingly incurring condo board-levied fines – fines that you, as the condo owner, will ultimately be responsible for paying.
Everything we’ve written about today is great information to know about once you’ve got a quality tenant lined up and ready to go – but how do you get to that point in the first place? We’re glad you asked.
Right now, we’re in the midst of a rental market, meaning that tenants have all the choice and selection in the world when it comes to where they hang their hat at the end of the day. With this in mind, the biggest piece of advice we can give you to make your property attractive to potential occupants is to be competitive. Now is not the time to try and haggle an extra $50/month out of your prospective tenants. Do some research, look at comparable rental properties within the area, and set your price accordingly.
We also recommend enlisting the services of a property management-type service to help keep things moving along smoothly. If you decide to go this route, we’d encourage you to seek out a smaller, locally-based business. Smaller companies with slimmer portfolios tend to be able to offer better services for a lower price point while taking an inherent pride in what they do that you just don’t often see from bigger outfits. Plus, it’ll be easier on your wallet as a renter, which is always a nice bonus!
From there, it’s often a matter of using your best judgement and common sense to bring on a good tenant. Does he or she have a steady job? If not, it might make paying rent difficult! Is there a history of financial responsibility? Find out by running a credit check on your potential tenant’s financial history – a move you’re well within your rights to take as a renter, and one that we always wholeheartedly encourage.
At the end of the day, the key takeaway we’d like to leave you with here is this: take your time when choosing a tenant. Don’t rush into anything just because you need the money and are looking to make some quick cash. Trust us – it’ll end up costing you far more in the long run if you bring in somebody who isn’t the right fit. Do your research, understand your condo’s bylaws around tenancy, and bring in the right occupant – follow these steps, and you’ll have set yourself up for renter success!
Still have questions or concerns about renting out your unit? Feeling stressed at the idea of letting the wrong person into your home? We can help! Give us a call at Catalyst Condo Management today and we’ll walk you through everything you need to know to take that next step and rent your condo out with confidence.