As a property owner, there are many reasons why you may want to rent out your Winnipeg home. You could be moving and don’t want to sell your home. Renting out your home could also have been part of your plans when you bought the home.
Regardless of the reason, renting out your home can be a great investment move. If you make the right decisions, you may be able to earn consistent rental income for many years to come.
That being said, renting out your Winnipeg home isn’t as simple as just looking for a tenant and starting to collect rent. There are certain steps you need to take in order to convert your home into a rental property.
The following are tips on how to rent out your home in Winnipeg the proper way.
Tip #1: Get the right insurance for your home.
Homeowner’s insurance is designed for owner-occupied dwelling. As such, you’ll need a different insurance policy to cover your tenants. That’s because renting out a home comes with its own unique challenges.
Landlord’s insurance protects landlords against risks associated with renting out a home. Normally, it includes buildings and contents insurance, but can also provide landlord-specific covers like loss of rent.
In addition, landlord’s insurance will also offer protection against potential liabilities. For instance, if the tenant (or their guest) injures themselves while at your property, and you’re found to be at fault.
Generally speaking, expect to pay about 20 percent more a year for landlord’s insurance than you would for homeowner’s insurance.
Tip #2: Make your Winnipeg home ready to rent.
You want to make your rental home as pleasing to prospective tenants as possible. Remember, you aren’t the only option tenants have. So, you have to make sure your property stands out from the competition.
Now, there are many things that go into making a home rent-ready. For one, you want to make sure that your home is as clean as a whistle. Second, you’ll want to check that all appliances are in good working order. And third, you’ll also want to ensure the home is pest-free.
Additionally, making your home rent-ready also means charging the right rent. Carry out a comparative market analysis and then make adjustments based on the property’s uniqueness.
Tip #3: Know Winnipeg, Manitoba rental laws.
This is crucial!
Every Canadian city, including Winnipeg, has special laws that govern the landlord-tenant relationship. The Residential Tenancies Act provides guidelines on various issues, including rent, repairs and deposits.
Following the provisions of the act isn’t an option; it’s mandatory. Therefore, you cannot use ignorance of the law as a defense in court.
Tip #4: Calculate your expected margins.
Before you rent out your Winnipeg home, make sure you do the math. After all, the goal of renting out a home is to make money. So, sit down and crunch some numbers to see whether or not the home is going to be profitable or not.
To know your expected profit margins, you’ll need to factor in your gross income, as well as the operational costs.
Perhaps the best way to do this is to use the 1 percent rule. According to the rule, a profitable rental investment is one that’s able to rent out for at least 1% of the property’s total purchase price.
So, if your Winnipeg home costs, say, $300,000, then it should be able to make you at least $3,000 in monthly rental income for it to be considered a viable investment. Note, however, that this is the gross rental income. To calculate your net income, factor all the operating expenses, as well.
Tip #5: Begin the marketing process.
Is the investment going to be profitable? If so, then the next step should be to begin the marketing process. No one is going to know that you’re renting out your home unless you get the word out.
Marketing a property is a multi-prong approach. You’ll first need to come up with a rental ad. In the ad, highlight all important features that make the property stand out. For example, pets are allowed, the property has recently been renovated, or the appliances are brand new.
You’ll also want to include high-quality pictures of the property. Ideally, hire a professional to do it for you.
Also, don’t forget to provide an accurate description of the property. Including, the rental costs, size of the home, and the number of rooms.
Once you have the ad ready, the next process is to begin marketing it. As you probably know, prospective tenants search for their next apartment in various ways. Some prefer going the traditional route while others prefer searching digitally. So, make sure to market your property both ways for maximum reach.
Tip #6: Screen all interested applicants.
Tenants aren’t created the same. Some are every landlord’s dream, while others are nothing but headache. For the sake of your bottom line, you want a tenant that is reliable, respectful and responsible.
So, make sure you subject all applicants to a thorough screening process. A good screening process is one that examines a tenant in regards to their:
- Income level
- Rental history
- Criminal status
- Employment status
You’ll also want to make sure that your screening process is in line with the Manitoba Human Rights Code. The last thing you want is to get sued for discriminating against a tenant based on a protected characteristic.
Tip #7: Hire an experienced property management company.
Self-managing your Winnipeg rental property won’t be an easy walk in the park, especially if you’re just starting out. From advertising your property to collecting rent to maintaining it and everything in between, landlording can seem frustrating and a time-sink.
If you lack any prior experience, hiring an experienced property management company is highly recommended. A good company will help you handle all aspects of property management.
The Bottom Line
Renting out your Winnipeg home can be lucrative. Be as it may, being a landlord does come with its own share of unique challenges. If you are just starting out, hiring a professional is a no-brainer. A good property management company, like Pillar Property Management Inc., will help you minimize risks and maximize your rental income potential.