Owning an Edmonton rental home property could make a wonderful passive income-generating investment and it’s great to know that you chose it to include in your personal investment portfolio.
Since this is your first time to be a landlord we made a short list for you to avoid making rookie mistakes. These are the ones that’s most obvious but many Edmontonians still make.
Note: For a complete list of Edmonton homes for sale, check out our Edmonton MLS Listings page.
IGNORANCE OF THE LAW. Remember to familiarize yourself with the local laws that specifically protects landlords and tenants. Never forget to include these laws in the contract of lease so you will be free from any future liability.
NOT KNOWING THE COST. This is the most harmful mistake on the list and it can bring the whole business down its knees. Most first-time landlords “underestimate” the cost of renting out the property. Since the property is meant to make money for you, the rental rate that you will charge should cover your mortgage for the property, its taxes, utilities, maintenance and repairs-the remaining balance you keep as profit.
NOT DOING BACKGROUND CHECK ON TENANTS. You must properly screen your tenant, do a simple background check. Your new tenant should not have any difficulty providing you with their work and office information for references. This process will give you a good understanding of the tenant/s financial status, whether he or she could pay the bills and rent properly.
ALLOWING LATE PAYMENTS. New landlords typically make the mistake of allowing tenants to pay late. That is a big NO-NO in this kind of business. If you allow your tenants, even for a single month, to miss the rental payment, he or she will definitely repeat it in the future.
The best way to avoid this is include a “late payment fee” in the contract and enforcing it brutally to the tenant/s.
Real estate investments come with its own set of challenges, but if you avoid the mistakes that we elaborated on this list, you will definitely be better off than those landlords who will experience the headache-inducing problems.
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