So you bought an investment property, or house with a mortgage helper (i.e. basement suite – very common in East Van).. now what? Time to rent it out to start benefitting from the extra monthly funds!
Most detached houses in East Van (and Vancouver in general) have rental suites in order to help with the high cost of the mortgage. This gives the owners flexibility in paying their mortgage off faster using the extra income, and then when their family grows and they need more space, they can stop renting out the suite and use it for teenagers, other family members or office spaces.
Most mortgage helpers in East Vancouver are basement suites, often 1 bedroom, but occasionally you’ll see home with a 2 bedroom suite, or two 1 bedroom suites. Some of the suites have in separate laundry, while others have the tenants travel to the nearest laundromat. MOST mortgage helpers are unauthorized suites (as in, not technically approved by the city). In order to get approval, you would have to ensure that the suite has certain ceiling heights, safety measures and more, which is often more hassle than it’s worth.
There are also a significant number of rental properties available in East Vancouver. As long as the condo building allows rentals, the owner can rent out the unit for rental market value, which is typically enough to cover mortgage payments and strata fees. Having a good tenant who stays for a few years is the ideal option – both in that you develop a trusting relationship with this person, but they also may start treating your property well, as if it’s their home.
East Vancouver – especially Mount Pleasant, Main Street, Gastown, Commercial Drive and Hastings East – are popular rental areas because the areas are highly desired to live in thanks to the great neighbourhood amenities. The closer the units are to the best restaurants, shops, transit, parks and community spaces, the more desired it’ll be by young professionals and families. Considering the unit, the more features and benefits it has, the higher rent you can command and the more interest you’ll have. Some of the most desired features include in suite laundry, new finishings, outdoor space, and a suite that’s at least partially above ground. East Vancouver will see a lot of students renting units thanks to the easy access to UBC, Emily Carr, the Art Institute, Langara and the Vancouver Film School.
Owning a rental suite in Vancouver is very common. You have a few options for managing the suite – with you’re the landlord and you handle all tenant matters, or you hire a property manager (who gets a cut of the monthly rent) to handle everything.
Owning a Rental Suite in East Van
Being the Landlord:
For most people who own a East Vancouver house with a basement suite, they choose to be their own landlord when renting it out.It makes sense considering that you also live in the same property and are nearby if there are any issues, and can keep an eye on the tenant.
The benefits are you’re in close proximity to your tenants when issues arise, and the property for when it needs repairs, you don’t have to pay the property management fees and if your family grows and you need the space, you can stop renting and use the suite for extra space.
You can also choose to be your own landlord if your investment property is separate from your home (i.e. if you own a condo that you rent out), you’ll just have to respond to your tenants inquiries for help or fixes around the home.
You don’t have to offer a furnished suite, but you can if you have the furniture available. Typically you can ask for more rent if you offer a furnished suite and you can offer shorter rental terms, though you also restrict yourself to certain tenants.
Craigslist is your best bet for advertising your rental in Vancouver – take a look on Craigslist to see what comparable properties are asking for in rent to get a sense of what you could ask for with yours. Good photos, and a clean apartment, make a big difference when it comes to the renting your property quickly and to good tenants. Asking for references is a good idea, as is asking the tenant to sign a one year lease. Many landlords also ask for a pet deposit to cover any damage that pets may cause.
Some of the downsides to being your own landlord include taking the time to advertise and show the property, handling all the tenants’ complaints and needed repairs, collecting rents and deposits, and taking the time to learn the Residential Tenancy Act which includes rules you’ll need to follow as the landlord. However, the end result is well worth it when you receive a cheque every month!
Hiring a Property Manager:
There are property management companies in Vancouver that will handle all aspects of your rental property on your behalf – al you do is reap the financial reward every month (after paying out the property manager of course). Most property management companies handle the entire process, including all communication with the tenants. WeLoveEastVan highly recommend Vancouver Real Properties for all your rental needs. They will offer a rental assessment – letting you know what your property is worth, advertising of your property, collection of rent and deposits, inspections to ensure the property has been well maintained, handling of tenant requests and complaints, dealing with the Strata Corporation (if necessary), hiring trades people to fix any maintenance issues. Typically, property management companies collect and deposit rent, then send you the remainder once docking their fees. Often, property management fees are about 10% of monthly rent.
Ensure that the property manager follows the Residential Tenancy Act in all their dealings with the property and tenants. Feel free to interview multiple property managers to ensure you’re comfortable with them and how they work.
Having an investment unit (or mortgage helper) is very beneficial in the long term, both in owning the extra space and having extra funds every month. Ensure you’ve read about the pros and cons so you know what to expect.