Property Management Blog
Tax Season Tips for Landlords
Do you own an investment property in Canada? If you are, this article is for you! Renting out a property is a lucrative venture if done well. You earn a passive rental income at the end of every month, among other benefits. Being a landlord, however, isn’t without responsibilities, and a key one is being […]
Do you own an investment property in Canada? If you are, this article is for you!
Renting out a property is a lucrative venture if done well. You earn a passive rental income at the end of every month, among other benefits. Being a landlord, however, isn’t without responsibilities, and a key one is being taxed compliant.
The Canada Revenue Agency expects landlords to declare all rental income when filing their tax returns come tax time. T means the question remains:
Do you know what exactly counts as rental income?
Do you know what deductions you qualify for?
Do you know the tax implications of things like capital expenditures, capital expenses, mortgage interest and insurance, house insurance, and other deductible expenses like repairs to adhere to safety standards?
In this article, we’ll help you answer all these questions and more.
What is the Difference Between a Current Expense and a Capital Expense?
Broadly speaking, a current expense is one that reoccurs every so often. A good example of a current expense is the cost of repainting your rental unit. Other costs include those you may incur to maintain or repair your rental unit.
On the other hand, a capital expenditure is one that doesn’t reoccur often. According to the Canada Revenue Agency (CRA), these are ones that help improve the fair market value of a property. They are upgrades or renovations that help extend a property’s useful life or replace faulty features or equipment.
An example of capital expenditure is installing vinyl siding on the outside of your wooden rental property.
In order to determine whether an expenditure is a current or capital expense, the CRA uses the following questions.
Does the upgrade or renovation offer the investment property a lasting advantage in regards to its selling price or market value?
Is the upgrade meant to maintain the property or improve its fair market value?
Is the expense meant for a separate asset or is part of the investment property?
Is the expense meant to repair the property or for the purpose of improving its desirability?
Is the repair expense meant to boost the property’s value or selling price and then sell it?
How much is the expense incurred?
You can learn more about the two categories of expenses from the Canada Revenue Agency’s platform.
Why Does the Type of Expense Matter?
As a landlord, knowing which category an expense falls into is crucial when it comes to taking advantage of deductible expenses. For current expenses, they only apply for the current year in which they occur.
On the other hand, a capital expense requires that it be divided in a specific way and be applied over a couple of years’ taxes. The outcome of this would be unique to you, so for further information, it’s best to contact an accountant, property management company, or financial professional.
What Type of Expenses is Tax Deductible in Canada?
The following is a list of deductible expenses that landlords in Canada can claim. You must do this on a special form (Form T776) when filling out your personal tax returns.
Office Expenses. Examples of these expenses include the cost of purchasing pencils, paper, pens, stationery, stamps, and so on. You can only apply these expenses if you made the purchases for business use only.
Motor Vehicle Expenses. You can make deductions on motor vehicle expenses based on the number of rentals you own.
Management fees. This applies to property owners who have hired professionals to manage their investments on their behalf. Payments that also fall under this category include expenses incurred in regard to real estate agents.
Repairs, Maintenance & Improvements. These include costs incurred in repainting or fixing a broken door. As these are current expenses, you can make the deductions for the year in which you incur them.
Professional Fees. The CRA also allows landlords to make deductions on any professional fees incurred. Examples of these include legal fees, property management fees, and consultancy fees.
Any improvements you make cannot be deducted for the year in which you incur them. You must spread the cost over a couple of years’ tax. Examples of capital expenditures include new lighting, electrical wiring, or plumbing.
You cannot, however, make deductions for legal expenses incurred when buying a rental property from the gross rental income. Rather, you must split them up between land and building, then sum them up to the specific expenses they belong to.
You can claim a variety of costs under interest. Chief on the list is mortgage interest. You can also deduct all other costs you incur when obtaining the mortgage, such as appraisal, mortgage application, legal fees, and so on. Mortgage principal isn’t deductible, however.
Do you pay any insurance premiums towards covering your investment property? If you do, you may be able to qualify for deductions on expenses you’ve incurred on building insurance during the year.
Have you advertised your property on websites, newspapers, magazines, and other similar places? If you have, you may be able to claim a tax deduction for all the payments made for it.
Property Taxes. Each province determines how much tax landlords must pay. The CRA allows you to then go ahead and minus the property taxes levied by your province in the current financial year.
Other expenses that qualify for tax deduction under the CRA include travel costs, prepared expenses, utility costs, as well as other rental expenses such as condominium fees, landscaping costs, lease cancellation payments, and vacant land.
It’s always a good idea to run any expenses you’re unsure about past an accountant or property management company to avoid any landlord mistakes.
Bottom Line
Tax season requires all landlords to abide by the requirements made by the Canada Revenue Agency. If you are just starting out, enlisting the help of an expert can be a great idea. Sutton Group is a trusted property management company in Grande Prairie, Alberta.
How to Be a Long-Distance Landlord
The reasons that may have led one such as yourself to be a long-distance landlord are varied. For example, you could be investing because: Of a work relocation. You’ve retired and moved to a sunnier locale. You found a great investment in another state that was too good to pass up. In this blog, we […]
The reasons that may have led one such as yourself to be a long-distance landlord are varied. For example, you could be investing because:
Of a work relocation.
You’ve retired and moved to a sunnier locale.
You found a great investment in another state that was too good to pass up.
In this blog, we at Sutton Property Management will share with you 6 tips on how to become a successful remote landlord.
Rent to Great Tenants
Finding great tenants and keeping them happy should be the primary goal of every landlord. Great tenants are great for any landlord’s bottom line. They pay rent on time, care for their rented premises, and renew their lease multiple times.
But if you manage the property remotely, you may not have the same chances as a local landlord. Unlike a landlord who is always available, you won’t be able to stop by for a quick drive-by inspection. But without great tenants, things could go wrong.
To defend against any potential risks, having a solid screening process is important. Among other things, your screening process should be able to qualify a tenant based on things like their:
Credit rating
Income level
Rental history
Employment background
Criminal background
Encourage Open Communication
As you may not be around as often, ensure that you establish clear and consistent communication.
You’ll want your tenant to notify you of any issues you find as soon as possible for a swift resolution. Doing so will benefit you in multiple ways. For one, you’ll be able to prevent small maintenance issues from becoming big. Secondly, taking corrective action quickly will prevent potential issues like rent withholding hassles.
Ensure your lease agreement has updated contact info, which should include your phone number. In addition, you may also want to call the tenant every now and then to check in.
Visit the Property When You Can
Did you know that travel expenses can be fully tax-deductible? The Internal Revenue Service (IRS) allows landlords to deduct all expenses related to their rental properties.
Basically, this means that you can deduct the costs of hotel stays, mileage, plane tickets, and even meals when you inspect the property.
So, you should make a point of visiting your rental property at least once every year. These visits should help you ensure your property is in great shape and that your tenant is happy and satisfied.
Stay Up to Date With The Community
If you live far from your property, it can be easy to get disconnected from the community there and that can be risky for your business. It isn’t uncommon for the business environment, government policy, and demographic to change every once in a while. Causing your property’s bottom line to change.
As a remote landlord, it’ll be in your best interest to keep up with local news and keep tabs on the rental market industry. This way, you’ll keep up to date with any changes that may impact your investment.
Build Relationships with Local Vendors
As you won’t be around when you’re needed, finding available local resources will be key. These are the people that you’ll want to have quickly available whenever you require their skills.
When a repair request pops up, for instance, these will be the people you’ll turn to for prompt action.
Understand the Local Rental Laws
As you won’t be around when you’re needed, finding available local resources will be key. These are the people that you’ll want to have quickly available whenever you require their skills.
When a repair request pops up, for instance, these will be the people you’ll turn to for prompt action.
Understand the Local Rental Laws
This cannot be overemphasized!
As a landlord, you have a responsibility of abiding by all local laws that affect your tenant. Some of the laws are as follows.
Security Deposits
In Alberta, your security deposit charge must not exceed the rent for one month.
Alberta Warranty of Habitability
As a landlord, you have a responsibility of keeping your rental property reasonably safe and in good repair at all times.
Eviction rules
You can only evict a tenant only in accordance with the Residential Tenancies Act (RTA). You cannot do things like lock the tenant out, remove their belongings, or shut down their amenities.
Landlord Entry
As a landlord, you have a right to enter your tenant’s rented premises. But you must only do so after serving your tenant advance notice of 24 hours. The only exceptions allowed are during emergency situations or in case of property abandonment by the tenant.
Fair Housing Rules
The Alberta Human Rights Act prohibits landlords from discriminating against their tenants on the basis of certain protected classes. The classes include race, color, ancestry, religion, nationality, disability, marital status, familial status, gender expression, gender identity, and sexual orientation.
If you fail to understand such laws before renting out your property, you may constantly find yourself in legal tussles with your tenant.
Bottom Line
As you can see, being a long-distance landlord is possible. But at the same time, it does come with its fair share of challenges. That’s why savvy rental property owners choose professional help.
Sutton Property Management can help manage your Grande Prairie rental property reliably and professionally. We can handle any property management issue on your behalf, from property showings to property marketing to rent collection. Get in touch with us today.
How to Boost Your Rental Property’s Curb Appeal
Adding curb appeal is an important part of improving the overall rental experience you offer. After all, prospective tenants’ first impressions are based on how your property looks from the outside. Improving your curb appeal often doesn’t require a lot of investment too. With simple and stylish add-ons, you can create a striking and attractive […]
Adding curb appeal is an important part of improving the overall rental experience you offer. After all, prospective tenants’ first impressions are based on how your property looks from the outside.
Improving your curb appeal often doesn’t require a lot of investment too. With simple and stylish add-ons, you can create a striking and attractive curb appeal. Even tiny efforts can lead to beautiful and eye-catching results. Generating more interest from passersby who could become prospects.
Sutton Group has put together these ways to improve your curb appeal for seasoned and new investors, giving you a competitive edge over other rentals in your area:
Use Bold Colors
Adding a bright color can be a great idea to make your rental’s curb appeal stand out. If your property is located in a place with similar rental homes painted in the same drab neutral shades, adding bright colors helps you stand out.
Repainting is not as expensive as other rental updates yet it’s just as effective in attracting new prospects. But you should avoid using a rainbow of shades. You should refrain from making your exteriors look tacky.
You don’t have to paint a bright shade to the entire exterior, you can apply it on your mailbox, door, or lamp post. You can also install several planters with colorful flowers for a cheerier look resulting in an attractive curb appeal.
Add Greenery
The more greenery around your rental home, the more inviting the environment is. Plants can transform your rental home into a comfortable and relaxing space.
A cost-effective idea is to hire a gardener or at least get their advice. So, you can pick plants that don’t require much effort to look after. Otherwise, your renters may end up neglecting them due to the amount of effort required in maintenance.
Install Attractive Lighting
Using lighting as a tool to attract more renters, can be a successful tactic. With plenty of affordable stylish lighting accessories to pick from, you need not worry about spending a lot to make your property look great.
A clever idea is to install a series of lighting on the pathway to your door’s rental. It naturally directs the eye, keeps everyone happy, and increases the security of your property.
Improve Your Front Door
If the door looks dull, chances are it won’t grab much attention. As a property owner, take time to examine your main door that faces the street to see where it could be improved upon.
Even if you’ve planted new grass or added interesting outdoor furnishings, a dreary front door can reduce your curb appeal. So, try adding a fresh coat of paint and replacing the hardware.
Clean Regularly
Keeping your property looking immaculate is important when attracting new renters as the basis of their opinions starts with your curb appeal. To achieve this, follow a consistent cleaning schedule.
If there are any needed repairs, act on them right away. Distorted gutters or broken fences can become an eyesore. Ensure you elicit a good impression by paying attention to your rental’s exterior. The cleaner it is, the more interest it attracts.
Landscape the Property
If you’ve added more greenery, you shouldn’t leave it looking unkempt. You should keep you’re your lawns mowed, and bushes, trees, and shrubs trimmed. If you have superb landscaping, it can really lift your curb appeal. Healthy plants are nice to look at.
Paint the Property
Landlords paint the property every 2 to 4 years depending on the laws in the city. This is part of making the rental home habitable. If you want to create more interesting paintings your exteriors are advisable.
‘Normal wear and tear’ does occur as time goes on, which can affect your rental’s exterior since they’re more exposed to the weather.
Choose high-quality paint and hire a professional painter to ensure that the results are excellent. Going the DIY route can be costly if more mistakes are made. In fact, to boost your curb appeal, it’s even more critical to highlight a properly painted rental home exterior.
Bottom Line
As a landlord, your task is to keep up with the maintenance of your property while continuing to build its value. Updating your curb appeal is part of your responsibility. It also motivates your current renters to renew their leases.
If you’re marketing a new property, focusing on your curb appeal can be a strategic way of attracting new tenants.
Do you need a trusted property management company to assist you in maintaining your rental property? Call Sutton Property Management today! We provide a wide range of property management services that will help you maximize your rental earnings.
Pros and Cons of Living in Grande Prairie
Are you interested in making Grande Prairie your next home? Make your move to Grande Prairie the easiest one yet by being 100% prepared. This article, prepared by us at Sutton Group, aims at showing you what makes Grande Prairie such a wonderful place to live and where it can improve. The Pros of Grand […]
Are you interested in making Grande Prairie your next home?
Make your move to Grande Prairie the easiest one yet by being 100% prepared. This article, prepared by us at Sutton Group, aims at showing you what makes Grande Prairie such a wonderful place to live and where it can improve.
The Pros of Grand Prairie
Part of being a great landlord is understanding what makes your area great. So, Grand Prairie has many great elements that would attract residents:
Great Outdoor Entertainment Areas
The landscape of Grande Prairie makes the city a scenic beauty. The great lakes and the Rocky Mountains attract many tourists, so Grand Prairie is ideal for outdoor entertainment and adventure.
The Muskoseepi Park offers multiple entertainment facilities, especially for families. Residents come to the venue to make memories with their kids and pets on the play area, biking tracks, or various sports facilities.
Fantastic Healthcare
Before you can relocate, you should consider the state of healthcare in the new area. You ought to be sure that you and your loved ones have easy access to the best healthcare options.
Fortunately, Grande Prairie has some of the best healthcare available in Canada. Should there be an accident or emergency, help is only a few minutes away.
There are several highly rated hospitals in Grand Prairie for your health needs. Their treatment utilizes modern medical technology operated by the best medical experts in the area. The local government has also invested in the city’s healthcare.
Various Real Estate Options
A question that investors ask before sinking their resources into a neighborhood is “Does the area offer great options for renting?”
Grand Prairie answers this by having a ton of rental options with any house sizing. If you are looking for studios, duplexes, apartments, or single-family homes, with a variety of amenities, you will find them in Grand Prairie.
Reliable Public Transport
Access to public transport is vital to consider before relocating to a new place. Unfortunately, not everyone owns a car or has the financial capability to acquire one.
So, is there good access to public transport in Grand Prairie? Luckily, yes.
Public transport is popular among Grande Prairie residents and there are two primary options, the regular buses, or the transit service. The former travel through the city while the latter operates from early in the morning to late at night.
Quality Education
The quality of the area’s school and education system is a major influence on a parent’s ultimate decision to relocate or not.
Education has been a focal point for the Alberta government. The provincial cities can boast a robust and comprehensive education system with numerous public schools. There are also local universities in the area.
High Rate of Income
Compared to other neighborhoods in Alberta, the locals of Grande Prairie earn significantly more than average.
Professionals and potential employees tend to move to the area looking for more attractive options. This should bode well for investors looking to buy investment properties in Grande Prairie and rent them out.
The Cons of Grande Prairie
Even though Grande Prairie has a variety of great neighborhoods, it has areas in which it can improve. Such as the following:
High-Income Tax
The stringent tax laws of Alberta apply to Grande Prairie residents. The income taxes applicable in Alberta are higher than in other regions in Canada. These tax laws are inclined positively toward the rich and middle-class fraction of the population.
No Nightlife
Those who enjoy vibrant nightlife will be disappointed with Grand Prairie. The city lacks the vibrancy and excitement found in surrounding cities. So, you may need to travel outside town to enjoy a night out.
A Higher Cost of Living
An area’s average cost of living is important to understand before you move there. You want to know if you can afford to live there. Unfortunately, the cost of living in Grande Prairie is high.
Grande Prairie: An Excellent Place to Live
Although wintry weather and high-income taxes may turn you off to living in Grand Prairie, think about all that you will be missing by being far. The scenic beauty, good education, reliable public transport, and tourist attractions are just a few of what the residents enjoy daily.
These factors and many more make Grande Prairie an excellent place to live or spend your vacation months.
Bottom Line
By knowing the needs and expectations of owners, investors, and tenants, Sutton Property Management has provided stability and growth for our partners.
We are a family-owned and operated property management firm in Grande Prairie, Alberta and there is no situation we have not seen. We have delivered first-class service to property owners by combining current technology with personal attention.
As a result, we at Sutton Property Management are happy to provide the area’s most comprehensive property management services.
Becoming a DIY Landlord? Six Mistakes to Avoid
Investing in a rental property or converting your home into a rental can be an exciting challenge. But new landlords tend to prefer running the property themselves, which can cause problems. New landlords can be caught unaware of the demands of running a rental property. Inexperienced landlords may also not be aware of the variety […]
Investing in a rental property or converting your home into a rental can be an exciting challenge. But new landlords tend to prefer running the property themselves, which can cause problems.
New landlords can be caught unaware of the demands of running a rental property. Inexperienced landlords may also not be aware of the variety of tasks involved in keeping up the condition of their rental unit.
So, we at Sutton Group have put together this article to help all landlords avoid common mistakes when running a rental property:
Write A Lease Agreement
Having a signed rental agreement with your tenants can offer you protection in case a lawsuit is filed against you. Written contracts are binding given that both the landlord and tenants signed the document.
These leasing agreements outline the terms and conditions of the tenancy and they can offer guidance to renters. Without one, asking a tenant to comply with property policies can be tough. Leasing agreements must be made with care and must be legally compliant with State and local laws.
Inspect the Property Thoroughly
Renters are bound to stay for the long-term if the rental property is well-looked after. Although the bulk of the landlord’s responsibility falls on maintaining the unit and adhering to habitability laws, tenants also share in the duty of keeping the rental in reasonable condition.
As a landlord, you should perform regular property inspections. Some landlords even conduct preventive maintenance to catch minor issues early and save on repair costs.
The best thing about being vigilant of your rental’s upkeep is that tenants end up happy. Helping you avoid frequent tenant complaints. Property owners are expected to ensure that their rental homes are secure and meet safety standards.
Fill Any Vacancies
Vacancies are bound to happen when tenants move out and it can take a while to find new renters. So, landlords should have a contingency plan for when this occurs.
Getting your property to rent-ready requires maintenance costs as you tackle repairs and market your vacant unit.
So, it is advisable for property owners to have at least a three-month budget for property maintenance expenses. Setting up these funds will give you peace of mind when you are between tenants.
Screen Your Prospects
In a rush to land tenants, DIY landlords can often miss screening prospects thoroughly. This is a bad practice as it is essential to perform detailed background checking so you know if you have a quality tenant or not.
You can call up previous landlords to find out if their rental homes were treated well. As property damage can be costly, you want to safeguard against abusive and neglectful renters. It is best to minimize the risks by adopting a comprehensive tenant screening procedure right from the start.
Manage Your Time
Being a DIY landlord is a job in of itself. You need to schedule regular inspections and contact the right contractors for property repairs. If time is limited and you have multiple units to manage or working a demanding career, you might need the support of a property management company.
While being a self-managing landlord allows you to learn by doing, it can also hamper your effectiveness if you do not manage your time properly.
You may fail to address tenant complaints right away or respond late to important maintenance issues. As a landlord, your main responsibility is to weigh if you are allocating sufficient time to running your rental home.
Hire a Property Management Company
Running a rental requires the firm enforcement of policies, especially adherence to rent payment schedules. So, outsourcing to a third party for rent collection can be effective.
Property management companies do well as professional representatives of property owners. They have organized systems set up and can be strict in following the leasing agreements. They can also manage things like curb appeal, marketing, emergency maintenance, and eviction proceedings should a renter become abusive and refuse to pay the rent accordingly.
A Property Management company can also help you to process any and all of your taxes. Making tax season fair easier.
Bottom Line
DIY landlords often fail to account for the huge costs of mistakes due to a lack of time and management experience. So, to avoid this and help build your property business, consider hiring a trustworthy property management company to oversee your rental operations and streamline systems.
Remember that your property investment should offer you consistent returns and time freedom. If not, then you may benefit from some help from an expert property manager like Sutton Property Management.
Call today at (780) 532 4900 to find out the different property management services they are offering. You can also send them a message at solutions@suttonpm.com. One of the costliest mistakes is mishandling arrears: read what filing an RTDRS claim in Alberta actually requires before you need to do it.
How to Know if Your Rental Meets Safety Standards
A crucial part of managing rental properties is prioritizing a safe and secure environment. Even State laws require property owners to adhere to building safety, health codes and keeping the rentals habitable. To determine if your rental meets the safety standards, it’s advisable to perform frequent inspections. In addition to shielding your renters from harm, […]
A crucial part of managing rental properties is prioritizing a safe and secure environment. Even State laws require property owners to adhere to building safety, health codes and keeping the rentals habitable.
To determine if your rental meets the safety standards, it’s advisable to perform frequent inspections.
In addition to shielding your renters from harm, conducting preventive maintenance can prevent a number of problems in your property. It can slow down normal wear and tear and keep your tenants happy.
In this post, we are highlighting the areas you should inspect to ensure that they meet the safety standards.
1. Doors and Windows
Take time to inspect the doors in your rental. As the main access point of a home, a good and solid door can protect your tenants from intruders. Ensure that the door frames are solid and the hinges are tight. Place a peephole and bolts to further fortify your door from trespassers.
Another access point are the windows. Regularly test if the latches are solid. If not, install stronger locks. The more durable your doors and windows, the better you can protect your renters from criminals.
2. Walls, Ceilings and Flooring
For flooring, it helps to have smooth and non-slip surfaces. High quality material must be used. This guards against accidents. Children often run around and are most at risk. If residents are older, then they can also be vulnerable to falls. If you spot signs of uneven flooring, it’s best to schedule a foundation inspection.
For walls, be sure there are no cracks. Walls should look smooth and even. If you notice any bulging, curving and peeling paint, schedule for repair. The issue can be traced to a leak or foundation problem. Both are costly if not addressed quickly.
For ceilings, insulation is important to maximize comfort. Proper insulation will ensure that your unit stays warm in the winter and cool in the summer. It also saves on energy costs.
When inspecting the unit, look for water stains, new cracks, peeling paint and a sagging appearance. This indicates that water damage is present. Watch for droppings and gnaw marks too, since Alberta's housing standards require rentals to be free of insect and rodent infestations; see our pest control guide for Alberta landlords.
3. Electrical System
Electrical systems need to be checked since they present danger when faulty wires exist.
Fires often originate from poor electrical conditions. To prevent this from happening, avoid circuit overload. Install more sockets and be cautious when operating your electrical appliances.
Schedule an inspection with a licensed electrician to meet the electrical system’s safety standards.
4. Plumbing
Plumbing issues are generally costly so frequent checkups are a necessity. You must clean the gutters and drainage system. Leaks must also be fixed, and damaged pipes must be replaced.
If you delay fixing broken pipes, flooding can occur. This can cause damage to wooden floors and furniture. Water damage also creates mold problems, which can put the residents’ health at risk.
5. Home Security
Security systems deter trespassers from entering your home. You should invest in security cameras, alarms, motion sensors and smoke detectors. Having these safety devices are instrumental to guarding the safety of your rental space. For the legal side, see our guide to smoke and carbon monoxide alarm rules for Alberta rentals.
Be sure to test your security systems to make sure they’re working properly.
6. Appliance Maintenance
Note down the life expectancy of each appliance and replace or repair those that are damaged.
Using appliances when damaged can lead to more damage.
Invest in high quality appliances to reduce breakdowns and preserve their usage. Safety features also accompany newer gadgets.
7. Heating System
Heaters can cause fires if not well-maintained. Schedule an inspection to assess if there’s any damage to the heating system. This should be done prior to the winter season when heaters are heavily used. Also, boilers should be evaluated annually.
Age of Property
While all properties should be regularly inspected, pay close attention to older properties.
Property renovations are essential for older properties. This is to ensure that the rental home is safe for the residents.
Main structures, home systems, flooring and roof need to be examined so they remains secure.
Bottom Line
As a landlord, tenant safety should be your top priority. To ensure security, you should conduct property inspections regularly.
During your inspection, be sure to assess the following:
Plumbing systems
Electrical systems
Heating systems
Security systems
Appliances
Walls
Floors
Ceiling
Doors
Windows
No matter your property’s age, be sure it adheres to the property safety standards.
If you don’t think you have time to ensure your properties are safe and secure, or you don’t think you have time for regular property inspections, then hire a property management company!
At Sutton Property Management, we can perform preventive maintenance on your rental home and take care of all your property management responsibilities.
Contact us today!
How to Conduct a Tenant Walkthrough Inspection
When a new tenant moves in, it is essential that you conduct a thorough walkthrough inspection to document the exact state of the property. By conducting a walkthrough inspection with your tenant, you will protect yourself from having to pay for any potential damage that occurs while the tenant is living on your property. In […]
When a new tenant moves in, it is essential that you conduct a thorough walkthrough inspection to document the exact state of the property. By conducting a walkthrough inspection with your tenant, you will protect yourself from having to pay for any potential damage that occurs while the tenant is living on your property.
In a walkthrough inspection, you will follow a checklist and have your tenant sign off on it. This way, if the damage is to occur, you will readily have proof that the damage was not existing when the tenant moved in. With this proof, you will be able to deduct the damage from the security deposit without dispute.
Now that you know why it is important to conduct an inspection, let’s get started! In this article, you will learn how to conduct a walkthrough inspection and protect yourself from having to pay for any potential damage to your property.
Creating a Checklist
Having a good checklist is key to conducting a good walkthrough. A checklist will not only ensure that you don’t miss anything that could violate landlord-tenant laws, but you can have your new tenant sign off on each point on the checklist.
We’ve put together a list of what you should include on your checklist. Keep in mind that you may need to add/remove things from your own checklist depending on what amenities your property has.
Condition of flooring
Condition of walls and ceiling
Condition of doors and windows
Condition of kitchen appliances
Condition of bathroom fixtures
Condition of countertops
Condition of fireplace
Condition of outdoor living area
When documenting conditions, be as detailed as possible. You must write the exact condition of the property and have your tenant sign off on it. When your tenant moves out, you will use the same checklist and document the condition of the property again.
If you have a detailed write-up when the tenant moves in, you will be able to quickly account for even the smallest amount of damage when your tenant moves out. Note any signs of pests as well, because without that record the cost of an infestation usually stays with the owner, as our guide to pest control responsibilities in Alberta rentals explains.
But, if you have any questions, you could contact a property management company like us at Sutton Group. We have years of experience managing property inspections and will be happy to help.
What to do Before the Inspection With Your New Tenant
Before you inspect your property with your new tenant, you will of course want to inspect it by yourself first. Normal wear and tear are expected to happen, so you will likely want to fix things or even make upgrades to your property between tenants.
For example, you might want to paint the walls if there are small marks or consider updating your kitchen appliances if they are becoming dated.
When you show your new tenant that you treat the property with care, they are likely to do the same. A tenant will be less likely to treat a property with care if it is not in good shape when they move in.
What to do During the Inspection
When conducting the inspection with your tenant, go over everything in detail and answer any questions your tenant may have. This is also a good time to discuss clauses in the lease agreement related to things like painting the unit or putting nails on the walls to hang pictures as well as what constitutes breaking the lease.
Remember that the inspection is protecting both you and your tenant. So, you will want to show them that you care and that you want them to understand rules relating to what they are allowed to do to the property.
What to do When Your Tenant Moves out
When your tenant moves out you will conduct a walkthrough inspection using the same checklist as when they move in. The move-out inspection should be conducted when the tenant has removed all their belongings and cleaned the unit. Ideally, you will conduct the inspection when the tenant turns over the keys.
Just like when the tenant moved in, you will go over the condition of the property in detail. If damage has occurred, the tenant will not be able to say that the damage was existing when they moved in, because they signed off on the condition of the property during move-in. Hopefully, this streamlines any end-of-tenancy issues.
Bottom Line
A walkthrough inspection doesn’t need to be complicated! Make sure you create a detailed checklist and have your tenants sign off on it as you conduct a walkthrough when they move in.
Your property should be in good condition when the new tenant moves in. By showing the tenant that you care about the property, they will also treat it with care.
When your previous tenant moves out, you should make any necessary repairs to the property before your new tenant moves in. This is also an excellent time to make upgrades to the property.
When a tenant moves out, you will conduct a walkthrough inspection of the property using the same checklist as when you moved in. This way, you can easily account for any potential damage to the property.
If you have any further questions, please don’t hesitate to contact us at Sutton Group.
15 Terms All Real Estate Investors Should Know
Of all the options for investments, real estate stands out among the best. For starters, it offers landlords a steady and reliable stream of income. Other benefits that make real estate a notable investment option include the tax benefits, its appreciation qualities, and that it’s a hedge against inflation. However, property follows the same trends […]
Of all the options for investments, real estate stands out among the best. For starters, it offers landlords a steady and reliable stream of income. Other benefits that make real estate a notable investment option include the tax benefits, its appreciation qualities, and that it’s a hedge against inflation.
However, property follows the same trends as other investments. The world of real estate investing has its own jargon when matters are being discussed or during transactions. As a result, some people new to investing in Grand Prairie real estate may feel out-of-the-loop.
In this blog by Sutton Group, the leading property management company in Grande Prairie, we’ll break down a few real estate terms that all investors should know!
1. Rental Property
Starting off easy, here – when speaking about properties as an investment, rental properties are usually the kind being referred to. A landlord receives periodic (usually monthly) payments for the occupation of their property. A rental property can either be residential or commercial.
2. Traditional Rental/Long-term Rental
This is where a tenant will occupy a space for a longer period of time. It’s the most common form of renting. This particular option has several benefits to you as the landlord, as it offers you a more consistent income, it’s easier to manage, and results in a lower turnover.
Long-term tenants usually sign leases that last a year.
3. Short-Term Rental/Vacation Rentals
This is a form of renting that’s become more popular in recent years thanks to the use of short-term vacation apps such as Airbnb, Booking.com, and Expedia. Renters occupy a furnished property for a short period of time, spanning between a few days to a week or two.
Depending on the particulars of the market, short-term rentals can offer landlords more money than long-term rentals. This is true in popular vacation spots, where owners are able to quickly adjust pricing during the popular season.
4. Cash Flow
This refers to the money you take home every month after deducting all operating expenses and costs. Cash flow at the end of every month can be positive or negative, depending on your rental property performance.
5. Pre-approval letter
This is a document you acquire from a lender or borrower, stating their willingness to lend you a certain amount of money. This document should not be mistaken for an assured loan offer.
Sellers often consider buyers who have a preapproval letter. In most cases, the document has an expiry date on it, from 30 to 60 days. Therefore, only get the letter once you’ve identified the investment property of your dreams.
6. Debt-to-Income Ratio
This financial metric is one of many used by lenders. It’s used to contrast the possible monthly debt repayments against gross income.
This metric is used to determine whether an individual is able to meet the demands of their monthly mortgage repayments.
7. Credit Score
Yet another financial measure that’s expressed as a numerical figure. An individual’s credit score shows their creditworthiness and will determine whether you qualify for a loan based on past credit files.
8. Off-Market Property
For a property to be sold, a seller or their agent will usually advertise the property on numerous listing platforms. An off-market property is one that’s for sale, but isn’t listed or advertised on listing sites.
9. Foreclosure
To acquire a property, a homeowner or rental property owner may consider taking a loan. If you do so, you’ll be required to pay monthly or quarterly repayments.
If you fail to make these repayments, the lender has the right to repossess the property. The property will be said to be in ‘foreclosure’.
A home can also be in foreclosure due to unpaid property taxes or other fees.
10. Homeowners Association Fees
While more common in the states, Homeowners Associations do exist in Canada. These are a body that govern the management of properties in a community, subdivision, or condominium.
HOA fees assist the association in meeting its obligations, such as maintaining amenities and repairs to common areas.
When evaluating a home or rental property, you should consider whether you’ll need to pay HOA fees.
11. Buyer’s Market
This term refers to a property market where the demand for property is lower than the supply of new housing. Due to this, sellers are bound to lower their prices. A buyer’s market is the perfect market for any investor to start buying properties.
12. Seller’s Market
In a seller’s market, the demand for property is significantly higher than the supply of new housing. The higher demand causes the prices to increase, making it an attractive market for sellers. A great example of this is what happened in 2020.
13. Appreciation
This is one of the big benefits of investing in real estate. Appreciation refers to the increase in the value of an asset.
Several factors can cause this increase in value: improvements in the local economic situation, renovations, infrastructure development, or local development in the neighborhood.
However, it should be noted that appreciation is not a given. House prices can depreciate. If there is a significant decline in demand or the property isn’t well-maintained, you can expect the value to drop.
14. Predictive Analysis
This is the collection and analysis of historical data to predict future trends in the market. Predictive analysis is important for real estate investing, as it offers investors reliable forecasts so they can use to make informed decisions.
15. Net Operating Income
Often abbreviated as NOI, this is the income that an investment property generates annually after the deduction of all property expenses. The expenses considered in this calculation include utilities, management fees, and property taxes.
Trusted Grande Prairie Property Management Company
Real estate is a specialized field that requires resources, expertise, and industry knowledge. Investing in a poorly performing market could lead to the loss of your hard-earned money and savings. Unburden yourself of this stress by contacting the experts at Sutton Group!
Our professional services are designed with the client in mind. We always seek to create solutions that will meet your individual needs as a property investor. Our reputable team is available, committed, and ready to offer you great services, as we’ve done for many investors before!
Hiring a Property Manager vs. Self-Managing: What’s Better?
“Should I hire a property manager or self-manage my rental property?” This is a question that every property investor has probably found themselves asking at one time or another! For some investors, self-management may be a good option. This is especially true if you live close to your property and have prior experience in managing […]
“Should I hire a property manager or self-manage my rental property?” This is a question that every property investor has probably found themselves asking at one time or another!
For some investors, self-management may be a good option. This is especially true if you live close to your property and have prior experience in managing and maintaining rentals. Self-management can also be a good option if you’re looking to have full control over your investment.
For others, however, hiring a property manager can be in your best interest. You may be able to save a lot of time and stress if you hire a good property manager.
Whether you’re already a property owner or you’re looking to buy an investment property in Alberta, we’ll help you make the decision between self-managing or hiring a property management company.
Benefits of Self-Managing your Rental Property
1. You’ll get some experience.
Experience is key when it comes to running a business, and a rental investment isn’t any different. Managing the day-to-day tasks of running your property will help you learn the ropes of the business.
Also, the experience you acquire may help you later on; if you eventually choose to have others run your property, you’ll know how they should treat your investment. You’ll be able to know what the best strategy is for your property.
2. No one cares about your property as much as you do.
This isn’t to say that all property owners care for their properties in the same way, of course. But you’re the one who paid for the property, so chances are, you’re the one who cares most about it!
That extra care can make all the difference. There are good and bad property managers, some of whom won’t take care of your property as well as you would.
3. All decisions will be yours.
You’ll have increased control over your property if you choose to manage it yourself. Not having to consult with anyone else will mean an easier decision-making process.
4. You might save some money.
Generally speaking, hiring a property management company means you’ll have to give them a cut of your gross rental income. The fee varies for each property manager, but it typically hovers around 10 percent.
So, while you can technically save yourself that loss of profit by managing your property yourself, there are other things to consider.
The role of a property manager is to make you money by bringing in tenants who renew their leases consistently, and thus increase your long-term investment return.
A team of property managers is usually able to do this more effectively than a single landlord, so you may lose money in the long run by self-managing. That being said, it depends on your experience and time commitment.
Benefits of Hiring a Property Management Company
1. A property management company is resourceful.
A property management company is in business for one purpose: to manage rental properties.
As a single landlord, you have many responsibilities to tend to outside of managing your rental. A property management company, on the other hand, is always working to keep your property marketable and profitable.
They have the staff, policies, technology, contacts, and all other resources such as notices and application forms necessary to run a successful rental.
In addition, a good property management company will have an established list of reliable vendors and contractors to call upon whenever necessary.
2. A property management company understands all relevant laws.
Many regulations govern the landlord-tenant relationship, from landlord-tenant laws to habitability laws and more. If you aren’t well-versed in these laws, you may accidentally find yourself in legal hot water.
In Canada, each province has its own renting law. There are different rules that landlords and tenants must follow in each province. In Alberta, for instance, landlords are required to familiarize themselves with the Residential Tenancies Act.
A good property management company will be knowledgeable about the act, and represent you in court should any legal issues arise.
3. You’ll have free time to do other things.
This is arguably one of the top reasons why property owners choose to hire property managers.
Being a landlord is time-intensive. Between finding and screening tenants to maintaining the unit and collecting rent, being a landlord can feel exhausting.
Luckily for you, hiring a property management company can free up time so that you can tend to more important things in your life.
4. A property management company can handle all aspects of property management.
Being a landlord can be stressful, no doubt. Between unhappy tenants and late-night maintenance calls, managing your property can be anything but easy.
Thankfully, hiring a good property management company can help you with all aspects of property management. You won’t have to worry about:
Filling vacant units. A good property manager will have a reliable marketing strategy to help you fill your vacancies quickly.
Renting to the wrong tenants. A good property manager will have an effective screening process that minimizes the chances of renting to a problem tenant, and can handle evictions if needed.
Responding to maintenance calls. Whether urgent or not, a property manager will have the resources to respond to maintenance and repair issues in a timely manner.
Missed or late rent payments. Rent is the bread and butter of any rental investment. A good property manager will not only know how much to charge tenants, but also have effective strategies in place for collecting it.
So, that brings us to the question: To self-manage or to hire a property management company? Much like everything else, there is no direct answer. You’ll have to consider a lot of things, such as your free time, rental management skills, and experience.
How to Find a Good Property Management Company in Alberta
If you choose to hire a property management company, then it’s imperative to hire the right one. Because, just like everything else in life, no two companies are the same. So, how do you find the right management company in Alberta?
By screening them!
The following are some questions you’ll want to a property manager:
How much are your property management fees?
What services do you provide?
How do you screen prospective tenants?
How do you handle maintenance requests? Do you have an in-house maintenance crew, or do you hire outsiders?
How do you handle late or missed rent payments?
How effective is your marketing process?
How many rental properties do you currently have in your management portfolio?
What criteria do you have when determining the rent amount to charge tenants?
Do you have a license from the Real Estate Council of Alberta (RECA)?
If you’re looking for the best property management company in Grand Prairie, Alberta, get in touch with Sutton Property Management! We have many effective services that’ve helped countless landlords just like yourself over the years.
How to Increase Your Income Without Raising Rent
Owning a rental property is one of the best ways to make a good passive income. Once you have attracted tenants, you can be guaranteed a fixed income. After several years of receiving the same fixed amount, you may feel it’s time to increase the rent. However, increasing the rent may result in a […]
Owning a rental property is one of the best ways to make a good passive income. Once you have attracted tenants, you can be guaranteed a fixed income. After several years of receiving the same fixed amount, you may feel it’s time to increase the rent.
However, increasing the rent may result in a higher tenant turnover rate that will be counterproductive to growing your investment. So, how do you increase your income without raising the rent?
In this article, we offer some alternative ways on how to increase your income without raising the rent for your rental property.
Enforce Penalties for Late Payment
Late payment fees are typically a standard item in current leasing agreements. However, these fees may not always be enforced. This provides a great way to increase your income, by enforcing what is legally yours. Furthermore, by a keeping record of the payment dates, it will be easier to enforce the collection of late payment fees.
Property management companies are a great solution to enforcing these fees. They can help you keep track of your tenant’s payment records, collect the fees owed to you, and deal with your tenants directly, leaving you with more free time and money in your pocket.
Impose Pet Fees on Your Tenants
In Alberta, it is up to you as the landlord to decide if you want to allow pets in the building. Allowing pets in the property can potentially lead to higher repair costs after the tenant and their pet has left the unit.
Charging pet fees can be a great way to having these payments covered. Thus, putting more money in your pocket. Pet fees are a one-time deposit separate from security deposits in Alberta and must be enforced on the tenant for a genuine reason. Being able to research and determine a proper pet fee can be an essential need when trying to save for future repair costs.
A professional service such as a property management company could be an asset in helping you determine a proper and fair pet fee, while also saving on repair costs. They can also help collect the pet fee from your tenants for you.
Build Relationships With Local Businesses
As a property owner, building repairs are an unavoidable task. Whether it is for plumbing, landscaping or daily maintenance, repairs need to get done. These can be costly.
Maintaining and keeping a solid business relationship with local service providers can help save costs in the long term through personal discounts and being a returning client.
Hiring a property management company may also prove to be a great asset in reducing maintenance costs. These companies will already have strong relationships with reliable local businesses to quickly resolve maintenance issues on your building for a reduced cost.
By dealing with these companies for you, they can also help ensure the quality of the workmanship needed to take care of your properties. This can save you the time from building these relationships, and get you the savings where they matter most- your bank account!
Offer More Storage Spaces
Anyone can appreciate having more storage space. You can use this opportunity to make some extra money. You can charge more from your tenants for access to storage spaces such as in basements, attics or sheds.
This can be especially profitable for multifamily and urban properties since most of them would appreciate additional storage space. If you have more than enough space you can let out the storage to neighboring tenants.
Rent Out Parking Spaces
If you have limited parking space for your tenants, you can look for additional parking spaces for your tenants. You can use this as a means to make more money where you charge them for parking in these spaces. This can be particularly useful for properties in urban locations.
Conclusion
The tips above are just some of the many ways you can make an extra income from your property. However, just as with any other investment it is important to research before putting an idea into action.
This research can be time-consuming and require you to be familiar with legal boundaries. This is why a property management company may be the right solution for helping you diversify your investment in a safe and reliable way.
For more sound and professional advice on your property needs, reach out to Sutton Property Management. Our team is always ready and willing to discuss all things property with you. We have helped hundreds of landlords and property investors in the past and can do the same for your investment in Alberta real estate. One income option worth pricing out first is adding a legal secondary suite in Grande Prairie.