Make sure you hire the right property manager.
Owning a rental property is not just about collecting the rent on time. It is also about making sure that your property/investment is being properly maintained.
Here is an example of what can happen courtesy of Mark Weisleder, a real estate lawyer in the city of Toronto who writes a weekly column for the Toronto Star.
A man in B.C. wanted to rent his home for a year while he traveled to Egypt with his family. He hired a property manager to find a tenant and manage the property while he was away. The property manager found a tenant, who moved in and eventually trashed the place.
When the man returned from Egypt, his home was in terrible condition and he sued the property manager for the damages. He was successful with his claim in small claims court and was awarded the maximum $25,000 for damages.
It was found that due to the fact that the property manager failed to properly qualify the tenant by recognizing red flags and not inspecting the property on a consistent basis, they were in fact grossly negligent.
One example, had the property manager just “Googled” the name of the tenant, they would have discovered that the tenant had a criminal record, prior drug use and that her children were taken away from her. The rental application from the tenant was incomplete with no information about employers and no questions were asked as to how she could afford the monthly rent of $1,495 when her prior rental was only $700.
The property manager did not take any pictures at the beginning of the rental agreement to prove what condition the property was in.
With all this being said, the tenant had rented out rooms in the house, placed locks on doors to create additional units within the home, all without permission.
In Ontario, a landlord is permitted to access their rental unit by giving 24 hours notice to the tenant. This way landlords can ensure that a tenant is properly maintaining the home, make repairs, show the property to potential buyers and view the state of repair. Once a month or once every two months would be considered permissible, anything more than that could be interpreted as harassment.
If you or someone you know is considering renting a property, please contact me for more information about my Property Management Service.
Here is a link to my Investment Management company, www.rggroup.ca.