Were you prepared for the responsibility of becoming a landlady?
Once I began to consider an income property, I read the Ontario Residential Tenancies Act. It’s not an exciting read, but essential for learning about landlord and tenant rights and responsibilities as well as all the notification forms. Did you know that if you have to give a tenant a notice you should slide it under their door and not stick it to their door? It turns out that little details matter in law.
Having honest conversations with acquaintances that had landlord experiences was also helpful. I even chatted with one of the property managers of the building in which I was previously renting!
One area I wish I had investigated more before purchasing was developing connections in the skilled trades. I didn’t have a plumber, electrician, or carpenter that I knew and trusted and I would have reached out for names ahead of time instead of waiting for a problem.
What skills and qualities does one have to have to be a successful landlady?
Being a landlord is not just about managing bricks and mortar. It is managing relationships and you have to be an effective problem solver when there is a repair to be made, a noise complaint or late rent.
Unless you plan to have your property managed by a professional, you need to have time. That lawn isn’t going to mow itself and you certainly can’t wait to shovel the walkway on an icy day. Your best financial position is to be able to do some things yourself and that takes time.
Do you need to be handy? Yes and no. You will save a great deal of money if you can handle small jobs such as painting and yard work. If you are not up to the bigger jobs, watch more television. Seriously. Many programs and even youtube can be informative about larger home repairs and, although you may not tackle those jobs yourself, you will be better informed and less likely to be taken advantage of when you hire trades people.
Financial literacy is important. When you are making renovation decision, it is important to know what is a “write off” again your rental income for your current year’s taxes and what are “capital gains” improvements that you can use to your advantage when you sell your property. Even if you hire an accountant, you need to keep track of all of your income and expenses and have an organized system for bills and receipts. You also need to be organized to check references and the credit of potential tenants.
Flexibility is needed when remembering that your tenants are not you. They will not do things the way you would and as long as they are respectful and paying their rent, you may need to let some things go. This is especially important if you live in the building with your tenants. The ability to stay calm is essential. You may be tempted to shed some tears when the first time you run the tub and the water pours through the ceiling of the unit below, but you need to stay composed and call a plumber. (Okay, I’ll admit to a tearful episode before calling…)
If you had to do one thing over again what would it be?
Most issues I have had revolved around noise. During the purchase process, I would have brought a friend to viewings and requested that they make noise in one unit while I was in the others. That way, I could have gauged how sound traveled in the building. I probably would have still purchased this property, but I would have included soundproofing in my initial renovations instead of having to go back and make improvements later, at a greater expense. Did I really want to pay to have carpeting put back down after refinishing lovely hardwood floors? No.
Tell us about some of the issues that came up that took skill to work through?
Patience is a virtue. Even though you are the landlord, you may need to put yourself last for a while. When I purchased the property, I only had enough savings to renovate one of the units. Although I dreamed of a beautiful kitchen and a glistening modern bathroom, I spent my limited funds on one of the units to be rented out. Living with a dodgy kitchen with 1950’s broken drawers and a pink tiled bathroom with a worn green tub was no treat. However, by doing that I now get much more rental income and I am getting very close to turning my unit into a home.
According to this experienced landlady, to be a successful landlord one needs to be prepared and educated. Although it’s a great deal of work to manage a multiple family dwelling, the financial payoff can be rewarding. It’s a great way to build equity while paying down the mortgage with the rental income with a goal toward owning that single family you have so intently set your sights on. It isn’t easy so ask yourself before you undertake this monumental task: