Do you have a vacant or soon-to-be vacant condo unit for lease?
When it comes to renting out a condo investment unit, we're often asked whether one should venture the task alone or work with a Realtor to find a new tenant.
If you're looking for some direction, we've summarized some of the major pros and cons of each scenario to help you decide what's best for you.
Online Classifieds
If you're planning to find a tenant without the help of a real estate professional, placing an ad on online classified sites such as Craigslist or Kijiji can provide a high level of exposure for your rental unit.
When it comes to renting out a condo investment unit, we're often asked whether one should venture the task alone or work with a Realtor to find a new tenant.
If you're looking for some direction, we've summarized some of the major pros and cons of each scenario to help you decide what's best for you.
Online Classifieds
If you're planning to find a tenant without the help of a real estate professional, placing an ad on online classified sites such as Craigslist or Kijiji can provide a high level of exposure for your rental unit.
Pros:
- High level of exposure: With the heavy online presence of classifieds giants such as Craigslist and Kijiji, you may be able to capture a high level of interest with just one ad.
- Full control: You'll not only be able to market your rental unit exactly how you want to, you'll also have an opportunity to meet and qualify potential tenants firsthand.
Did you know? Rental listings posted to LiveHigh.com are automatically uploaded to Craigslist for your convenience. This is an optional feature than can be turned off, but we offer this service in order to minimize your efforts while maximizing your return!
Cons:
- Time-consuming: It takes time to create an ad (photographing your unit, writing the ad and uploading it to various sites for the best exposure), to manage the ad (taking calls, arranging appointments, showing the unit and re-posting ads as required) and to find a suitable tenant (not everyone you meet will be interested in your unit, and not everyone who's interested in your unit will be a suitable tenant).
- More time spent on the market: Depending on the location of your rental unit, you may find that your unit will spend more time on the market without the help of a professional (particularly a licensed Realtor). They're not only likely to have access to many more interested and qualified prospects, they also have the ability to market your unit to thousands of other professionals and their prospects.
- Negotiations and contracts: Once you've landed a suitable tenant, you'll still need to negotiate the lease, create the appropriate paperwork and ensure that everything is signed and legally binding. As most of us aren't well-versed in these areas, this may be overwhelming and you could potentially be exposing yourself to a higher element of risk.
- Cost: As a post-script to the point above, lawyers' fees (if you're planning to use one) can be costly as you'll likely be charged by the hour.
Hiring a REALTOR® or Property Management Company
If you're limited on time or are uncomfortable with the idea of finding a tenant on your own, leaving your condo rental in the hands of a licensed real estate professional might be a better route for you to take.
Pros:
- Overall stress reduction: An experienced, qualified professional has dealt with many similar transactions and as such, should be able to provide sound advice with respect to all facets of the rental process. From pricing to negotiations and credit checks to paperwork, a professional understands the process and will be able to provide guidance and support you from the day you begin your search until after your new tenant moves in.
- Less time on market: A experienced, qualified professional will be able to advise you on how to best stage your unit to maximize its appeal. They also have access to a much larger pool of prospective tenants, potentially minimizing your time on the market.
- Cost-savings: The longer your unit sits vacant, the more money you'll be throwing away on monthly mortgage payments, maintenance fees, property taxes and insurance. Remember, time is money! A qualified real estate professional can help you get a tenant in quickly, reducing both your personal time and energy spent on this process as well as your rate of vacancy.
- Ongoing property management: Property managers (and even some Realtors) will provide ongoing property management. This includes but isn't limited to collecting rent, addressing tenant issues and maintaining the unit. While most "local" landlords won't want to pay the extra fees for this type of additional service, it comes in very handy for owners who may live further away or even out-of-country.
Cons:
- Cost: In exchange for a Realtor's services, you'll be required to pay the associated brokerage commissions. While there isn't a "standard" fee and typical commissions may vary by area, in the GTA you can expect to pay on average the equivalent of one month's rent plus applicable taxes on a one-year lease. The cost of hiring a property management company is often much higher; typical charges include not only a fee for finding the tenant, but also ongoing fees for suite maintenance.
Hints & Tips:
- Realistically assess your time, capabilities and budget before you decide which route to take in finding a new tenant. While you could potentially save a few dollars by sourcing a tenant on your own, you may also find that after you factor in the amount of energy, time, research, fuel (hey, gas isn't cheap!) and legwork it'll require to find a renter, you may as well have hired a professional. Remember the old adage - time is money! Hiring the right professional for your needs can mean money well spent.
- Consult appropriate local boards for advice; the Landlord and Tenant Board of Ontario offers a wealth of information for both landlords and tenants alike, providing guidelines on the latest laws and legislation surrounding tenancy agreements.
- Be sure to conduct the appropriate background checks whether you find a tenant on your own or hire a real estate professional. This typically includes credit, employment and reference checks. While it may be tempting to allow the first applicant to walk through your door to move in and start paying the rent, it's important to remember that not everyone is who they say they are, or does what they say they will. This critical step won't be an issue for a good tenant and will help to minimize your risk and save you from bigger headaches down the road.
