So, you’ve heard some people talking about all the money they make from their rental properties and think it’s a good idea for you too! It might be… or it might not be! Being a landlord is more than sitting back to watch your bank account grow. Here are some of the topics that you need to consider before you leap into the world of rental income properties with 4 doors or less (properties with more than 4 doors have different rules):
Sixth, you will need to deal with tenants. Yes, you will need to deal with tenants (unless you hire a Property Manager)…. It’s Christmas Family Dinner, you get a call from a tenant with a backed up toilet. Is it worth having a rental? Or, you arrive at a rental unit to collect rent only to find that it is empty. Would you know what to do next? What if a tenant with 3 crying babies has not paid her rent and has nowhere to go? Could you evict her? These are the tough questions that you have to ask yourself before you commit to owning a rental property.
Finally, you will probably sell the property at some point. Again, you will need to consult an Accountant regarding the rules of claiming a capital gains vs income on the sale of that property and what tax rate you will be charged on the income. You will also need to be careful about claiming any depreciation while you own the property because it could have serious tax implications at sale time. As you can see, there are many topics to consider before jumping into the world of Landlords. Obviously, it can be very lucrative if it is done correctly! In Cornwall, there is the Landlord Association (www.sdglandlord.ca ) that has a wide variety of experienced landlords and Property Managers with a plethora of information. While I am not an expert on being a landlord, If you have any questions about getting started, please feel free to contact me and I can help direct you on your journey.
Jenni MacDonald (www.jmacdonald.ca) is a Mortgage Broker with Dominion Lending Centres The Mortgage Source (Lic.#10145). She has over 5 years of experience in the Mortgage Industry and works with at least 40 lenders including banks, credit unions, and private lenders to find the best mortgage for each client. You can contact her by phone or text at 613-551-0639 or via email at [email protected]