Over the next 15 years, the Winnipeg Metropolitan Area is set to hit 1 million people. For shrewd entrepreneurs, that means opportunity; those people are going to need somewhere to live, and renting is becoming ever more popular. While the housing market can be unpredictable, there’s an expectation that prices will continue to be driven up because of the influx of people. That means getting in on the ground floor (no pun intended) right now is a good idea; to do this, you’ll need to understand the responsibilities of landlords and tenants as well as how to find and manage tenants.
The responsibilities of a landlord are diverse and varied; to get complete information on what’s expected of you if you intend on becoming a landlord, review the Residential Tenancies Branch (the Branch) guide to becoming a landlord. You should also make an appointment with the Branch in order to obtain relevant forms and information about policies, responsibilities, and dispute resolution mechanisms.
The landlord is responsible for the general upkeep and maintenance of the rental unit. This means the landlord must be ready to repair problems in the unit, including trouble with electrical, plumbing or other essential utilities. Landlords are also responsible for the security of the unit; they must investigate complaints about dangerous tenants and resolve issues that threaten the safety of their tenants, like faulty appliances and short-circuits. They must also maintain the security of the entrance, making sure tenants have appropriate locks for their doors.
Yard maintenance is of special concern in Winnipeg, especially in the wintertime; accumulated snow can make it difficult for tenants to leave the premises, and ice can be a safety hazard. As a landlord, it is your responsibility to maintain the premises; that means you have to mow the lawn and clear the snow in an efficient manner. More information on this can be found here.
Landlords must ensure that the unit is suitable to be moved into on the agreed move-in date. They must also provide receipts for any cash payments of rent; this includes payments made through pre-authorized debit agreements. This receipt will show the date the payment was received, the amount received, and the address for which the rent was paid.
Tenants, too, have a wide variety of responsibilities that landlords should know about. They must pay their rent on time. They must not engage in illegal activities on the premises that could cause harm to or disturb other residents. They must not damage the unit, they must inform the landlord of necessary repairs to the unit as soon as possible, and they must abide by the written rules in the rental agreement. There is recourse for landlords if tenants violate any of their responsibilities through the Branch.
Finding and Managing Tenants
To find tenants, you first need a space in good repair that you’d like to rent out. To make sure your space is in good repair, consider using a home inspector, or inspect the home yourself using a checklist. The key concern is the overall condition of the infrastructure in your home. Make sure there are no leaky pipes, and that the space you’re looking to rent has sufficient electricity; you might have to replace your electrical if you have an old 60 amp system. Check your roof, and have an experienced roofer do any necessary repairs or replacements; this is especially important if you plan on renting out the upstairs or attic of a building, as leaks are both uncomfortable and hazardous for your clients. You might also do renovations to make the home more attractive; anything from a new coat of paint to new appliances to a full remodel of the interior could help you attract more tenants.
Now that you’ve read the regulations and you’ve created a space for your prospective tenants, it’s time to find them. One great way of doing this is to create an ideal tenant profile; who do you want to attract to your building? Seniors are amazing prospective tenants; they’re usually quiet and well mannered, and will put the effort into keeping their space clean and tidy. They are, however, mostly attracted to quiet neighborhoods; targeting seniors might be appropriate in the suburbs, but less so in Osborne Village. Millenials are another great group to target; they tend to appreciate units in hip neighborhoods, and while they might not be, on average, as clean and polite as seniors, they tend to have more disposable income and might respond well to higher-end amenities in your space.
Advertise your rental units everywhere. Kijiji, social media, RentBoard – the list goes on. Tell your friends to tell their friends that you have a space available. When writing a description of your space, be sure to target the demographics you singled out when you created your ideal tenant profile. Include a lot of well-lit photos of the space – consider staging it with furniture in order to make it look more appealing. You can also include the furniture in the rent, if you’d like; furnished units can be attractive to some clients. Make sure the price is prominently displayed – you can offer a discount on the first month’s rent if you want to get a tenant in quickly.
You should have a rental agreement drawn up; while the Branch accepts verbal contracts, written contracts ensure there is no discrepancy when discussing what was agreed upon. These contracts can be month-to-month or fixed term, and there are advantages to each: with month-to-month, you can quickly get rid of troublesome tenants, while fixed term contracts mean more secure income. The rental agreement can include terms not required by the Branch; you might request that your tenants do not smoke, you might include fees for use of a parking space, damage deposit, and/or any number of other rules, requests or offers. You and your tenant should do a walkthrough of the space together, so you can agree on any repairs that need to be done and on the general state of the space. Take photos and create copies – this will help if the tenant damages the space and you want the damage deposit.
When it comes to managing tenants, there are two schools of thought. You can find the tenants yourself, handle all of their calls, find contractors to do maintenance and yard work (or do it yourself) and deal with disputes. This is the cheapest option, but it does take up a lot of time – and time is money, so it might not be so cheap after all. Alternatively, you can hire a property manager to take care of all of this for you; they usually charge a percentage of profits, so it’s better for landlords with a large number of units. You’ll be earning rental income, so your tax filing will change; there are write-offs for landlords as well. Again, you can elect to manage this yourself or you can hire a professional to do it for you. As with anything, only you know if you have the knowledge, skill and time to handle this yourself, and as you grow the number of rental properties you own, the paperwork gets more complex.