Managing Income Property A Challenge. Landlord Tips.

From Moneywise.

Owning an income property or two is both a great way to make money and a real financial challenge.

It’s been an excellent source of income for people over the last decade or so, as real estate prices in Canada have soared. But making money from property is a lot of work, an ongoing expense and requires some financial know-how to, in the end, make it make sense.

Landlord Prep for Income Tax Season

Since it costs money to operate a rental property, being a landlord comes with numerous tax deductions, which you can use to offset your rental income.

In general, it’s a good idea to keep all your receipts and use an accountant to help you determine which are legitimate and whether to consider an expense a current expense (like paint or a new door lock) or a capital expense (a new furnace).

When you file your taxes, you have to fill out a special form: a T776 Statement of Real Estate Rentals. As well, if you are buying a new house or condo in order to rent it out, you might be eligible for an HST or PST rebate. In short, the tax side of being a landlord is complex. While you can find some information from Revenue Canada here you truly do need a tax professional helping you to make sure you fill things out property and get all the refunds and deductions possible.

Landlords Need to Know the Law

Every province has an act that governs relations between tenants and landlords — get to know the rules where you live to avoid conflict and, in extreme cases, court. These laws spell out the limits on how much rent you can charge, how much notice you have to give before raising rent, rules about security deposits and eviction rules and limitations. Here’s a quick list of the different provincial rules from the Canadian Mortgage and Housing Corporation.

As well, have a look at the Canadian Human Rights Code. This says a landlord cannot discriminate against a potential tenant based on race, sexual orientation and even being on social assistance. This means you must be cautious during the interview process and not ask personal questions about religion, plans to have more children and the like.

Going against these rules can land you in court or, at the very least, disrupt your relationship with your tenants.

Link to the rest here.

Image. Google Street View.

Thank you for reading.