As a landlord, it’s important to know how to responsibly raise your rent when the time comes. Something most landlords in Ontario don’t know is that you can actually raise your rent by offering a rent discount. Jason McGuire answers questions about rent discounts, property inspections, and credit scores.
How do you raise your rent by offering a discount?
Discounting rent can sound scary, and you’re probably wondering how you can get more money out of something like that. Rent discounts come around because the landlord-tenant act wants you to treat tenants well and reward them for good behaviour. You can get 2% more out of your property by doing a prompt tenant discount. This is where, when your tenant pays you the rent on time, you give them 2% off. If you raise your rent by 2%, every time they’re late on rent you make a little bit more, and if they’re on time you get exactly what you already expect.
Property inspections are an extremely important part of renting out a property. Everybody should be inspecting their homes, but most landlords never go into their property for years!
Property Inspections – How, What, and When?
As a landlord, you should be checking on your property at least twice a year. When you go in you should do a thorough check and take pictures and notes. This will help with any possible disagreements or evictions if you have documentation. It’s important to find the right balance when it comes to how often you’re checking in on your property. Monthly visits are too much, tenants like their privacy and will find this frustrating and invasive. It’s important to be reasonable.
The top 5 things you should be looking through when you visit twice a year are:
- Maintenence – look for damage
- Check for plumbing leaks
- Check furnace filters
- Check for leaks under hot water tanks
- Ensure property has been properly winterized
- Check eaves and gutters
Credit scores are often used when screening for potential tenants, but many landlords don’t know how to properly utilize these scores.
Credit Scores – What do they really mean?
Credit scores are not designed for rental properties, they’re designed around people buying products or repaying loans. Humans have a different statistic when it comes to rental properties, which is understandable considering it’s normally the biggest portions of one’s expenses. It’s important to remember that credit scores aren’t everything. For example, you could have a tenant who has never missed a rent payment in their life but had a disagreement with a phone company, so now their credit has been destroyed. It’s helpful to look beyond the number and start viewing credit scores as part of the evaluation; not the whole thing. Something a lot of people don’t know is that the difference between a 650 credit score (far low end), and an 800 credit score (far high end), is only a 4% default rate, meaning they are only 4% more likely to fail when making a payment.