I’m in the process of closing on a two-bedroom condo which I’ll take possession of at the end of this month. I’ll be renting out the other bedroom and since it’s five minutes away from a university, I’m sure I’ll have no problems with finding someone willing to rent it. What I’m looking for, is things I should watch out for in a tenant and what potential pitfalls there are. I’m sure that specific laws will vary area to area (I’m in Alberta) but any advice is welcomed.
Protect yourself. Make sure your homeowners insurance is up to snuff with tenant coverage, or similar. Also check your liability insurance, etc.
No point in having your own place, rent out part of it and the tenant, the tenant’s actions and/or the tenant’s visitors cause you to be exposed.
Don’t know Canadian law, but since you may have a student as a tenant, make sure s/he has a parent or legal guardian co-signer who will be at the very least responsible for the rent and any physical property damage. Lay down the ground rules about having friends over – you’re not this person’s keeper, but you don’t want a ragin’ kegger complete with cops, either. Unless you don’t mind that. I’d treat this as more of a roommate search.
Don’t pick you tenant based solely on “hotness” then install cameras in the bathroom.
One word: deposit. Get one from your tenant.
I am not sure about the law in Canada, but be careful about how you conduct this enterprise. There are laws in the U.S. that protect renters. Here in Alaska, I cannot evict a renter during certain months (the cold ones, obviously) and only with lots of hassles during the remainder of the year. If you are going to draw up a contract and have the renter bound by the specifications therein, remember that you also will be bound by them. It might be easier to just have a “verbal agreement,” but YMMV. For the definitive example of this situation, rent and watch the movie"Pacific Heights." You’ll get a good idea of the landlord/renter relationship from seeing this movie.
Get a credit check (tho a young student might not have a history), check references. You can get them to pay for the credit check.
Have a written rental agreement. One clause is that ‘denying others use of common facilities is grounds for eviction’–among other grounds, like not paying rent. What it means is if they plug up the plumbing or keep you awake, you can technically evict them. Naturally you would not be trigger-happy with that, but if they do multiple small grief actions or one major grief action, this clause can usually be invoked.
Have an ‘assertive’ personality. I can see why successful landlords/landladies frequently are bossy and greedy, because if you’re a doormat you will get disgustedly out of the rental business.
Their personality or character: Imagine if you have to evict and they have a week to go, would you be comfortable with not being around during that time. And overly obsequious is just as bad a sign as arrogance.
Oh yes, I forgot the deposit: first month’s, last month’s rent, and damages. Surprising how much less stressy is is to know some little thing is covered.
And don’t rent to anyone who has worse luck than you do.
You know, in your own residence, you are part way in between a commercial transaction and a friendship. A lot of the landlord-tenant laws do not apply inside your own residence.
Having the right tenant is as good a protection (or better) than having the right rental agreement and procedures.
I am speaking from just barely satisfactory personal experience.
Try your library or bookstore, they should have contracts & info on this.
The single best piece of advice I ever heard regarding “whether one should become a landlord” was, “Only do it if you’d be able to evict people.” If you’re too softhearted to be able to kick deadbeat or nuisance tenants out into the street, then you’ll never make it as a landlord.
I’m going to take a different track than the above advice. Hire a professional property manager to find a tenant/roommate for you and collect all the funds and pay them back to you or directly to your mortgage company.
Property managers have the necessary experience to provide you with a good tenant and if necessary get rid of them. It also allows you to have a friendship with your roommate rather than a landlord/tenant relationship.
Whoa, easy there, fellas! If I read the OP correctly, s/he is proposing to rent out a bedroom in a condo unit whilst also occupying the condo unit him/herself. I believe that most jurisdictions have very different rules for “roommate” type rental scenarios from those governing a rental unit which the owner is not also occupying.
“No Pets”.
Say it together with me–“No Pets!”
Trust me on this.
Yes, this is the situation. (he, BTW)
And Bosda, the building is no pets, so that’s not a non-issue. Though I wouldn’t have minded getting a cat.
FIND OUT THE LAWS IN YOUR PROVINCE. In Ontario, you can’t actually say “no pets”, but you do have the right to ask that bothersome pets be gotten rid of (I am not familiar with the exact wording). And you CANNOT ASK FOR A RENT DEPOSIT OTHER THAN FIRST AND LAST MONTH’S RENT. This means no damage/security deposit, no pet deposit, etc. If you ask for last month’s rent, then you must be able to pay a 6% interest back PER YEAR to the tenant. You cannot evict a tenant under any circumstances, and VERY often the matter must be settled in Tribunal. For example, you cannot kick out a tenant for failing to pay rent - you must bring it to a judge/arbitrator.
IANAL, but I have read up a little on my rights as a tenant in Ontario, and I KNOW that they are in strong favour of the tenant in many cases (the legal document in question is the Tenant Protection Act). Consult a lawyer to write your lease, find out what your rights and responsibilites are, as well as what rights and responsibilities your tenant may have. If a tenant brings a valid case against you, you could lose a lot of money.
I think it’s fair to say that there is much more to it than what the SDMB can tell you, especially since it comes down to the details of provincial law. Consult a lawyer, and study up.
I was in this EXACT same position a few years ago. I bought a 2-bedroom condo and rented the other bedroom. I picked for a roomie the quietest most down to earth guy. It worked out Very Very well. (YMMV)
Aside from the other things added here; I gave my roomie the biggest bedroom. I did this knowing that he would live basically in the bedroom leaving the rest of the place to me. If I gave him the smaller one he would have to take up more living space in the rest of the unit. Give your roomie the biggest bedroom.