Archive for the ‘New landlords’ Category

So You Want to be a Landlord in Ontario in 2012

Sunday, January 1st, 2012

January 1st, 2012

 

After years of hard work you have some money saved up.

How can I make this money ‘work’ for me? you think.

Stocks, bonds and mutual funds

You consider investing in mutual funds, or even taking the risk of investing in stocks and bonds. The closer you look, the riskier it looks. It’s far too unstable for what your goals are.

Bank Accounts

How about a bank account? It’s very low risk and you won’t have to think your investment every day. You do some research, make some calls, and realize putting your money into a bank account will yield you such little profit it’s not worth getting your bank account bankbook out! The big banks might make money, but you won’t.

What about Real Estate?

As you continue to look for investment opportunities you remember one of your relatives mentioning he did well buying and flipping real estate. You also have a friend who bought a residential property and rented it out to tenants. The more you think about it, the more this makes sense!

So you want to be a landlord?

It seems pretty simple to be a landlord. You buy a residential property and rent it out. The tenants pay you monthly, which covers your mortgage payments. If you buy the right property and manage to rent it at a high rate you will also be making ‘cash flow’ every month!

Mortgage free and cash flow galore

You get out your calculator and see that if you put the cash flow back into the property you can pay off the mortgage in a few years. This means the rent will come directly to you and your wallet. This is serious money!

If you hold on to the house, it might appreciate

You look back at house prices from a few years ago and see houses in your area have gone up in value. If you look back ten years ago, you see they’ve almost doubled. You make a ten year plan and imagine how much your rental property will be worth a decade from now…and you can sell it mortgage free!

You have a fool proof plan and think “why isn’t everyone doing this?”

A closer look at being a landlord

Everyone isn’t doing it, because there are far more challenges than at first glance.

Over the next few months, we are going to tackle important issues and answer questions about becoming a landlord.   Lots of topics will be covered, from choosing an area to invest to describing how to fill out an N4 (that’s what you serve when your tenant decides they don’t have to pay rent!)

Happy New Year!

Property Managment

Monday, April 25th, 2011

Get it Rented and Managed by a Pro with Real Property Management Service

RPM Service has over 20 years experience managing properties with consistent high standards. We ensure your property is rented, monies are collected and the property is well-maintained.

The leading company that offers the full service solution to residential property management giving you
total peace of mind!  Serving Toronto, Mississauga and Brampton. Specializing in homes, condos and small apartments.

 

So Called Millionaire Tenant From Hell

Monday, April 18th, 2011

‘Millionaire’ tenant leaves trails of angry landlords

April 15, 2011

The Toronto Star has published a fascinating report on a tenant who claims to be a millionaire.  So why doesn’t he pay the rent?

(more…)

Lease Help

Sunday, September 12th, 2010

What are the most important things to make sure I put in my lease to protect myself?

• Full legal names of all tenants

• Term of the lease (month by month, yearly, etc)
• Amount of the monthly rent and what that includes/excludes
• When the rent is due
• Appliances and/or Furnishings Included
• Address for Service for the Landlord
• Special Clauses About Everything Else

Tenant screening

Wednesday, July 7th, 2010

Tenant Screening: Tips for Verifying Applicant’s Income

by Chris on July 5, 2010

While performing a tenant background check, it’s important to keep the focus on profitability.  Does this candidate possess the potential to pay rent for the entire term of the lease?

Tenant Screening for the Traditional Applicant

The majority of rental applicants will have traditional employment.  An employer reference is a crucial part of your tenant background check.

Be certain that the company you are seeking a reference from is a legitimate business concern,  not a fiction or a business wholely owned by the applicant.

Some employers are reluctant to discuss an employee over the phone, or may insist they do not offer employee references.

There are two ways to handle that situation:

First, you could offer to fax a copy of the verification statement from the application to the employer to show the employee’s authorization to release information.

Alternatively, you may place the onus on the applicant to ask their personnel office to release the information you need.  Be persistent and do not move forward with the applicant until you are able to verify the applicant’s employment history and salary.
Tenant Screening of Self-Employed Tenants

Many entreprenuers prefer self-employment to a standard job.  Today, self employment is a popular alternative to unemployment; however, more than half of these businesses will fail within the first four years.

When verifying income of the self-employed candidate, job history becomes a crucial part of the tenant screening process.  A candidate who has chosen self-employment as a way of life is probably more suited for the business world than someone who is scrambling to recover after a job layoff.

The self-employed applicant may not keep payroll records, although that may be required to properly assess taxes.  Indeed, the payment of taxes – or rather the incorrect payment of taxes and fees, may be what puts the business under.  Perhaps the biggest risk a landlord faces when renting to a self-employed tenant is having a business  creditor garnish the income.

Successful candidates will have banking and tax records to verify income.

Tenant credit reports are indispensible in showing if the self-employed candidate is overspending, or struggling to fund a business venture.

When conducting a tenant background check on the self-employed, look for:

  • Appropriate licensing
  • Listings in local business directories
  • Banking statements
  • Corporate records
  • Client references

If you find little evidence of the self-employed business outside of the rental application, you may have cause to worry about this tenant’s  potential.

Once you have collected the income information you need:

Decide if the applicant’s  income is enough to justify the rental price of your property.  Typically, rent should not exceed one-third to one-half of overall income.

Determine whether the applicant has a steady work history.  Bouncing between jobs is a sign this candidate may not possess the commitment needed to be a good renter.  Periods of unemployment foreshadow bills going unpaid.

Also, look for clues that  the applicant is spending beyond their means.

This post is provided by Tenant Verification Services, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada)