Landlords living overseas who own property in other territories are frequently presented with a conundrum – how exactly do they keep tabs on the tenancy of their various properties? After all, they’re far removed, often in different time zones and unable to do things like scheduling inspections, meeting personally with new tenants, etc.
The solution is for these individuals to hire a property management company to do the job for them. These locally-sourced companies provide huge net benefits for overseas landlords who cannot be present to conduct important property management routines.
THE VALUE PROPOSITION
The simple fact is that overseas landlords have more challenges managing their properties due to their physical distance. This level of detachment can actually affect earnings potential, especially if the property depreciates due to damage or other factors related to tenancy.
As a result, many overseas landlords may opt to sell their properties, rather than deal with the inconvenience. In doing so, they lose on actualizing long-term earning potential, particularly if the currency conversion is not in their favor. Offsetting that issue involves hiring a property management company to do the job for them. The property management company acts as liaisons to collect rent, screen tenants, and keep tabs on the health and durability of the property. If something breaks, they’re on hand to bring in professionals to fix it. If tenants are in violation of the contract, property management companies can take the necessary steps to remove them.
Every property is a long-term investment with a lot of earning potential. Selling too early and disposing of these property assets from one’s portfolio is not a wise strategy, particularly if the property investor wants to maintain a steady and healthy revenue stream well into retirement age.
THE RISKS OF GOING SOLO
Some overseas landlords may attempt to take care of things themselves, or trust in their tenants, but that opens up an entirely new set of risks that should be avoided. For instance, the simple process of repairing a property can be daunting. Contractors may overcharge, cut corners, or overlook things that would normally be dealt with by a property owner on the scene.
Similarly, tenants can skip out on rent for months at a time, or may involve by-law inspectors if repairs are not addressed. It’s difficult enough for many landlords to deal with non-paying tenants as it is, let alone trying to manage these issues from overseas.
A property management company knows the ins and outs of tenancy, and how to deal with non-paying or bad tenants. They have access to the right legal channels, and an understanding of how to mitigate the problem before it spirals out of control. Without a property management team at their side, overseas landlords could unwittingly drag a problem out for months, or even years at a time, incurring costs whilst losing huge amounts of revenue.
The pressure may escalate to such a degree that overseas landlords simply decide to cut their losses and sell their properties, but they also may face further loss. If the property has been irrevocably damaged by a bad tenant, overseas landlords could see their property valuation decrease, and less bidders show interest to buy a property that does not show well. Suddenly, a property with a high valuation could take too many knocks due to the issues plaguing it, making it that much harder to achieve a fair asking price.
There are ancillary factors to consider as well, including finding good tenants to take over when other tenants vacate. A remote long distance landlord cannot meet prospective tenants, cannot conduct outgoing and incoming suite inspections, and cannot identify repairs that may need attention before a new tenant moves in.
It’s far better for overseas landlords to put their properties in the hands of an established and reputable property management company. The costs are negligible compared to the overall peace of mind they bring to a landlord, whether domestic or foreign. The less a landlord has to do to keep an eye on a property, the more time they have to invest in other things.
If you are an existing or prospective overseas landlord with property to rent in Canada, please contact us at RentCore, and learn how we can take care of all the daily tasks of property management, so you don’t have to.
When it comes to renting out a property, tenants are expected to do their fair share of upkeep to maintain cleanliness and overall integrity. Many rental contracts come with these stipulations laid out, and they vary in scope. For instance, some contracts dictate that landlords will bring in third party companies to clear the snow or mow the lawn, but some do not.
Other contracts meet the tenant halfway, requiring them to do minor maintenance around and within the property to make sure it is kept up to code and spec. When it comes to educating tenants about the responsibilities of property maintenance, it’s wise to follow a few key steps.
BE THOROUGH FROM THE START
The key to avoiding any issues with tenants regarding property maintenance is to be clear and concise from the start. This begins with drafting a detailed rental agreement that doesn’t hide anything, and allows tenants to see exactly what they’ll be required to do. From there, the two parties can negotiate (if possible) and reach a consensus.
The last thing any landlord should do is obfuscate these responsibilities, or drop them on the tenant after the agreement has been signed. Doing so can lead to a host of legal headaches and unnecessary conflicts which can be avoided from day one. Tenants should know what is expected of them, and be allowed to ask pertinent questions before they sign on the dotted line.
FOSTER AN OPEN DOOR POLICY
Landlords do best when they open up the lines of communication with tenants. The last thing either party wants is to deal with the other on a consistent basis, but if the two can strike up a healthy working relationship, it will prevent more problems from popping up down the road.
Landlords should leave pertinent contact info with tenants – where they can be reached, if problems arise. Many landlords who do not have time to keep tabs on a property will seek the help of a property management company such as Rentcore. We know how difficult it can be to manage a property, especially if you’re a landlord with multiple properties or a busy work schedule. Regardless of who is in charge, tenants should know who to contact when they’re in a bind, or need answers to pressing questions regarding property maintenance.
PERFORM AN INSPECTION
Even after the rental agreement has been signed, landlords should refrain from sitting back and thinking that everything is going according to plan. Inspections are a way for landlords to make sure that everything is on the up and up. They might be able to spot needed repairs that inexperienced tenants may not notice.
Second, it gives the landlord the opportunity to see how the property is being treated. Tenant behavior may cause issues that can erode the quality and health of the property, such as putting mattresses on the floor without a bed frame. Other behavioral patterns can lead to problems with plumbing, insect infestations, mildew and mold growth, etc.
The caveat is that landlords must adhere to a strict set of tenancy rules determined by their respective locale. They cannot enter the property whenever they want, and must adhere to guidelines, such as providing 24 hour notice before showing up. Even then, there are stipulations landlords must adhere to, but it’s still possible to schedule inspections and make sure things are running smoothly.
Bear in mind that it may take only a single inspection to determine that the tenant is trustworthy, and will respect and care for the property. However, it’s still good to conduct the occasional inspection to make sure they’re sticking with it. From there, landlords can communicate with tenants and remind them of their responsibilities when it comes to property maintenance.
LEAD BY EXAMPLE
Some tenants, especially young ones, are inexperienced when it comes to property maintenance. Don’t hold that against them. Rather, look at it from the perspective of a teacher/student relationship, and use it as a means to educate them about how to perform said maintenance.
Most of the time, the maintenance in question is extremely straightforward, and merely requires time. Mowing the lawn is not rocket science, and once a tenant is shown how easy it is, they’ll be ready to tackle the task without your help the next time ‘round. The same principle applies across the board – lead by example, and your tenants will become self-reliant and proficient. Not only will this boost their confidence, but it will gain your trust.
CONSIDER THE TENANT’S NEEDS
Landlords should remember that not all tenants have the same skills, and some simply cannot perform certain tasks. For instance, those with heart problems or other physical ailments may not be healthy enough to shovel snow after a major storm. It then becomes an issue of compromise, and finding a workable solution.
Don’t reject a potentially great tenant just because they might have trouble with certain aspects of property maintenance. There are always workarounds, and it’s better to have a AAA tenant incapable of performing certain tasks, rather than a problem tenant who refuses to perform any task whatsoever.
Great tenants will abide by the wishes of the landlord when it comes to property maintenance, provided it’s agreed on beforehand, and both parties know what is expected. The more open the lines of communication are, the happier both landlord and tenant will be.
For more information on how Rentcore can help handle the intricacies of a rental agreement, while managing your property as a liaison between you and your tenants, please contact us!
So, you have property to rent out, and you’re excited about making some money. Before you hand over the keys to a new tenant, are you sure you’ve covered all your bases? It’s important to make sure that every detail has been checked, to avoid possible legal repercussions and stressful headaches.
Every prospective Landlord should have a checklist at the ready, to make sure nothing has been missed. When the time comes to rent out your space, you’ll have peace of mind knowing that you haven’t left anything to chance. That can help you avoid multiple pitfalls as the renting process moves forward.
It’s your responsibility to make sure that your tenants are safe and sound, and that means safe-proofing your property. This is a mixture of common sense, and adherence to all applicable regional and provincial laws and bylaws. It covers everything from basics like having a smoke alarm on every floor, to subtle things like stability of staircases, ventilation and electrical.
In fact, some of these safety-related criteria should best be left to a professional, in order to guarantee you aren’t liable for any injuries or damages. It can be hard to spot things like mold, which can be hazardous to your tenants’ health, but what about asbestos or lead in older housing units? If you’re the slightest bit unsure, it’s time to bring in someone who can give your property a professional examination.
PERFORM A QUALITY/DAMAGE CHECK
This is for your benefit, as well as your tenant. By performing quality and damage checks on your property, you can avoid a “he said, she said” scenario where both parties point the finger at one another over perceived damages. If your property is in need of repairs or fixings, make sure to take care of those before the tenant moves in.
It’s also important to walk through the property with your tenant and perform this inspection, so both are on the same page. It’s advisable to take video of your property before the tenant moves in, provided it has been timestamped. When both parties are aware of the status of a property, there’s no room for any funny business on either side.
THE LEASE AGREEMENT
Before tenants move in, they should sign a lease agreement which acts as a binding contract between both parties. Make sure all details are filled out, including all applicable terms and conditions, the rent amount per month, details regarding security deposits and fees, forbidden practices, maintenance agreements, damage accountability, tenancy limitations (ie. sub-leasing), the ability to keep pets, and right of entry.
The more details on paper, the better. Both parties will receive a copy so that there’s no confusion, but in case of a dispute, you’ll have all your necessary paperwork with the tenant’s signature attached. This can go a long way to nullifying any disputes before they erupt into something worse.
FIRST & LAST MONTH’S RENT
It’s important for Landlords to secure first and last month rent before tenants move in. Don’t neglect the security deposit, either (unless last month’s rent is the deposit, which is rare). While the practice of first and last month rent is somewhat flexible, it’s good practice to get both, just in case. Certain localities allow for exceptions to this rule, so be sure to check and make sure you aren’t violating any laws.
One of the biggest reasons for securing last month’s rent is to prevent tenants from taking off before their move-out date, which can leave Landlords scrambling to find a replacement tenant. It’s peace of mind for both sides, as tenants don’t have to pay the final month’s worth of rent while they secure rental funds for a new place.
CHANGING THE LOCKS
Renting to a new tenant may involve a changing of all the locks present on your property, which is a legal requirement. There’s no guarantee that previous tenants hadn’t managed to make backup keys, which can allow them to gain access to the property after a new tenant has moved in. This is a severe safety and liability issue that must be addressed. Make sure that new tenants get a brand new pair of keys that have never been used by anyone else before.
Of course, there is an exception to this rule – if your property has never been rented out before. With no previous tenant history to speak of, there’s no risk of strangers entering the property and committing mischief or crimes.
WORK WITH YOUR TENANTS
Not everything about the property rental world revolves around contracts and fine details. It’s wise to build a healthy and constructive relationship with your tenants, and hear their side of things. If you had a no-pets clause, yet your stellar tenant with excellent references claims to have a well-behaved cat, you might wish to relax your stance on a case-by-case basis.
Similarly, tenants may wish to actually improve on your property by asking to paint the walls, or perform some decorative renovations. Naturally, these are subjective, and you should be Ok with their ideas, but it may turn out to be mutually beneficial. The more you communicate and work with your tenants, the happier both sides will be. Make sure no lines are being crossed, and you may have solid, reliable and trustworthy tenants for years to come.
CONCLUSIONWhile it’s tempting to go solo when renting out your property, the truth is that mistakes can still happen. Having a good Landlord’s checklist is paramount when it comes to preventing issues, but it’s still no substitute for hiring a property management company that knows the ins and outs of the business, and how to navigate troublesome waters. If you’d rather escape the hassle and stress of renting out your property, be sure to contact us at RentCore so that we can assist. Even with our talented team involved in your property management, it’s still a great idea to get to know your tenants, and establish a healthy relationship with them. That way, everyone is happy, healthy, and enjoying your property the way it was meant to be enjoyed.