Thinking of Doing the Landlord Thing? Be Careful!
I know exactly where I was when I received the call. No, it wasn’t a call about a family member’s failing health or a natural disaster, so there’s perspective to be applied here, but it was still an expensive call.
The call informed me of over $10,000 in damage in my rental property back in my hometown. I’d moved away a couple years previous, and everything had gone smoothly with my first tenant.
Now, the current tenant had left a window open in the middle of winter (in Edmonton), a pipe froze, broke, and had caused an estimated 10K in damages to my condo and the one on the floor below.
What followed was a two year nightmare dealing with insurance companies, condo boards and, yes, the police.
Because of course, after flooding the building and failing to pay rent for 3 months, the tenant refused to leave.
Like I said, a nightmare.
Oh sure, I called this tenant’s references: a parent who vouched for their child. It was my first foray into the rental market, and since the first tenant had been so nice, I got lazy the second time around.
Please, for the love of your sanity, if you invest in real estate, check multiple references from prospective tenants’ professional and personal lives. Chances are you won’t run into a headache like mine, but why take the risk?
And even if your new tenant receives a reference so impressive even Mother Theresa would approve, mandate tenant insurance and make darn sure you’ve got insurance of your own. The mess with my condo could have set me back years, but fortunately the damages to my suite and the one below were covered.
Of course, it was an argument with both my insurance company and my renter’s as to who would cover the cost, and in the end a tiny detail that stipulated which party was responsible for floods originating within the building (a detail I had to uncover on my own) saved me $10,000.
The Golden Rule
Remember, even though it’s your property and you’ve invested in the rental market for a reason, your tenant is a real person who ought to be free to live their life in peace. My current tenant is fantastic, always pays on time and asks for very little. In fact, I have to pry just a little bit to make sure she’s still comfortable. The river of respect flows both ways; I respect her privacy and she respects the investment I’ve made.
Truth be told, neither of us really think about the contract too often. This is really the optimal state for a rental agreement on both sides, right?
Right. It’s almost boring in a sense.
But that’s ok. I’ll take a boring rental agreement every day of the week. I’ve seen the alternative, and it ain’t pretty.