I have a lot of clients who want to buy properties that have the possibility of renting out the basement for some extra income. There are several concerns that you should be aware of if you intend to do this.
- Is the apartment legal? In Barrie, very few basement apartments are actually legal apartments. If it’s not a legal apartment, you could potentially run into trouble with the City down the road if they find out about the rental.
- Will your lender allow you to have a tenant? Most banks offer you a certain rate because you will be living in the home. If you are going to have a tenant, you are supposed to tell them so that they can make adjustments on the interest rate. Often, the terms of your mortgage require you not to have tenants, so you should always check before you advertise the space for rent.
- Are you prepared to be a landlord? There are very strict rules about renting to individuals in Ontario. If you are seriously thinking about it, be sure that you are very familiar with the rules of the Residential Tenancies Act.
Becoming a landlord can be a great way to add income, but be sure it’s right for you.