Purchasing an investment property is only the first step as a property investor. The next step is actually managing the property. There are very specific management requirements you will have as a rental property owner. Here are five tips to make your investment a success.
Keep Up With Maintenance - This is important for two reasons. First, you are legally responsible for keeping the property up to certain health and safety standards. This includes keeping the common areas in good condition and making sure the tenants have somewhere to throw their garbage. Second, if your property is not maintained, you will have a hard time finding and keeping tenants. People do not want to live in a rat infested rental with constant plumbing issues.
Avoid Tenant Turnover - The next important way to successfully manage your rental property is to keep your tenants happy so that will want to keep renting from you. There are simple things you can do to keep tenants happy, such as quickly responding to repair requests and making an effort to place other good tenants in the property. One of the main reasons tenants move is because they are not happy with their neighbors. Having strict tenant screening procedures in place will help you weed out the good from the bad.
Follow Landlord Tenant Law - Understanding and following the Nova Scotia Residential Tenancies Act will help you manage your rental property and your tenants. It will provide a structure for you to follow, which will lead you to make fewer mistakes and therefore streamline the management process.
Hire a Property Manager - Managing a rental property can be overwhelming and time-consuming. Hiring a property manager is the right way to solve this problem for some property investors. You can hire a property manager to do as much or as little as you want. Some landlords only want them to collect the monthly rent, while others want property management companies to do everything from filling vacancies to handling all repairs. Keep in mind that there are many bad property managers out there who can completely destroy your rental property, so you need to screen property managers very thoroughly, just as you would prospective tenants.
Pay Your Taxes - Finally, to make money as a property investor, you need to make sure you are properly managing your financial obligations. One large obligation every investor has is to pay their taxes. Paying taxes as a rental property owner can be confusing. Since it is a business, you can often deduct home office expenses and since it is property, there are many deductions involving depreciation that you are allowed to take. It is often in your best interest to hire an accountant who is skilled in investment property tax law. He or she can help you to understand the deductions you are allowed to take, as well as the deductions that could raise a red flag with Revenue Canada.