At one time, nearly every financial advisor sang the praises of real estate investing as being among the safest and most profitable ventures out there. Recently, you may have noticed a little more silence on the topic.
Does that mean investing in real estate has fallen out of favour? It’s understandable that homeowners who have had a bad experience with a tenant are a little soured on the idea. There’s no question that being a landlord isn’t always easy, especially as the market and the rules keep changing.
However, if all of the pieces fall into place and you find an amazing tenant, owning an income property can lead you to greater prosperity and financial security. If only there was a comprehensive survival guide just for landlords in Peterborough. We couldn’t find one, so we created one! In this post, we’ve compiled some of our top tips and best practices to help you succeed as an investor in this challenging market.
Are you getting serious about investing in Peterborough real estate? Below is some related reading you are sure to enjoy:
- Teardown or Renovate?
- What Housing Structure Is Best for Peterborough Investors?
- How to Spot the Perfect Real Estate Investment
What an Impending Bill of Rights Might Mean for Landlords
As if the vast majority of the laws weren’t already stacked in favour of tenants. Now, there’s an impending bill of rights potentially on the way, which is why many landlords are feeling nervous. What will it mean for your investment if this legislation passes? For the most part, ethical landlords who follow the current law likely don’t need to worry. Let’s take a look at what might be coming down the pipeline.
A national lease agreement
The purpose of a national lease is to provide uniformity between different rental units and buildings across Canada. If all goes well, the path to conflict resolution should become more streamlined and the grounds for eviction clearer.
Landlords must disclose pricing history
Though knowing the pricing history of the unit can be a tool for tenants to negotiate, prices will still be primarily driven by supply and demand. And currently, supply is critically low while demand is through the roof. That said, you should always be transparent about your price and potential increases.
Provincial legal aid organizations to fight landlord abuse and “renovictions”
“Renovictions” can be a problem in today’s rental landscape. Though there are legitimate grounds for asking your tenant to leave to renovate your property, some landlords are taking advantage of it to raise the price. Whatever your stance, there are few tenants or landlords that would be against clearer guidelines.
Rental payments tied to credit scores
Under current legislation, paying rent on time doesn’t help a tenant’s credit score. On the flip side, skipping out on rent or being severely late also doesn’t hurt their ratings. All of this could be about to change, which could be good news for everyone. Tenants will benefit from better credit ratings if they ever need a loan or mortgage in the future. If this happens, they will be more motivated to make their rental payments on time, which will also help landlords.
The idea is that a tenant’s rights shouldn’t vary from one city or province to the next. There may be short-term implications as we all seek to understand the new guidelines. It’s all the more reason to proceed with caution through each step, particularly in vetting prospective tenants before signing a lease agreement.
The Advantage of Investing in Peterborough Real Estate
Most cities in Canada are experiencing a housing shortage, especially when it comes to available rental units. Peterborough had the lowest vacancy rate in Ontario for two years in a row from 2022 to 2023. And it doesn’t look like anything will change anytime soon.
If you were to invest in an income property, you would be providing a desperately needed housing unit that would be in high demand. This means a vast pool of prospective tenants to choose from who are searching for a long-term solution.
Bad apples still exist, of course. However, put yourself in a tenant’s shoes for a moment. If you were lucky enough to find a suitable home in such a tight market, wouldn’t you do everything you could to stay on the landlord’s good side? The trick to successful investing is finding one of the many good tenants seeking a positive relationship and a long-term solution for their housing needs.
What to Look for in a Tenant
Great tenants are out there and their numbers are growing every day. How do you know what to look for to ensure the right fit? Before advertising for your unit, take some time to think about what you would like to see in a landlord-tenant relationship.
Passing credit and criminal background checks are important to find a good tenant. But if you want a great tenant, these should be just the beginning of your assessment.
The process is similar to finding an employee if you were conducting job interviews. You would narrow it down to your top contenders based on the skills you were looking for, but you wouldn’t stop there. Chances are, you’d want to see certain “soft skills” to determine not just that the candidate could do the job, but would also be a positive presence in the workplace. In many ways, you should seek the same attributes in a prospective tenant. The result is finding the right fit who makes owning an income property not just successful, but pleasant.
- Excellent communication skills will help both parties understand the terms and expectations of the lease as well as lead to easier conflict resolution.
- Friendliness and respectful behaviour indicate that the tenant will get along with neighbours and not cause unnecessary disputes.
- Stable employment in the area doesn’t just mean that the tenant has a steady income, but could also suggest they are looking for long-term accommodations. The longer you have a high-quality tenant, the more successful and less stressful your role as a landlord will be.
There is even more valuable advice where this came from! Learn more in our other resources for landlords:
- New Landlord Checklist
- The Beginner’s Guide to Investing in Real Estate
- How To Be A Millennial Landlord
Create Your Support Network
Investing in real estate requires that you create and implement a solid plan for success. This plan will account for the unexpected, such as it taking longer than anticipated to find a tenant or what to do if they decide to move out before you’re ready. Familiarizing yourself with the Ontario Residential Tenancies Act is also essential.
Most of all, you should surround yourself with a support network that includes real estate professionals who know how to make a rental property work profitably and smoothly. This could include a property management company, especially if you own and manage multiple units.
At the very least, you should partner with a local real estate team with investment experience. A trusted expert can help with every phase of your venture, from finding the right property with income potential to performing extensive background checks to ensure you end up with an excellent tenant.
With enough research and expert guidance, you can skillfully navigate the process for a positive experience that is joyful and financially successful.
Do you have questions or want to know more about the fantastic investment opportunities you’ll find in Peterborough? Reach out today to team@jeffandkatie.ca or call 705-243-9797 for more information.
