When renting out your property, you have to first make a study about the market, especially if you own a prime property. It is worthwhile to know that the number of prime properties on the market that have been downgraded in price has dropped to its lowest level in three years. These properties are defined as those worth over $1 million according to realtors. The quantity of prime properties that are presently for sale and have had their asking price reduced from its original amount has fallen to 20%, down from 28% a year ago. They are now at its lowest level since summer 2012. Moreover, property owners or those looking to purchase properties that they could put up for rent should know that middling price reduction on prime properties across Canada now stands at 8.5%.
Another very interesting thing to take into consideration for landlords is about how renters’ priorities change as they get older. As always, the most significant factor overall is proximity to the business district, institutions, organizations, banks, medical facilities and many other places of interest. Somebody who is looking to rent will always prioritize accessibility because it is more economical in terms of transportation expenses plus the time they have to spend for travels; more importantly the main functions of the city are huddled in the central district and renters want to maximize their access to them. Many offices are also in the centre of town so renting a place located near these workplaces will minimize the amount of time they spend commuting and dealing with heavy traffic and bad weather.
On the other hand, the research data revealed that as renters reach their mid-thirties, they are more likely to focus on amenities which benefit their way of life when out of the workplace like enjoying al fresco dining or tea time so they tend to favour rental spaces near their favourite watering hole or would look for a place where these establishments are accessible.
There are two ways in which property-owners can make money through renting out a property. These are through rental income or capital growth but this entails landlords to understand well and know how to calculate before they enter the world of property rental business.
Capital growth is expressed as a percentage of how a property’s value increases in due course and is separate from any rental income received during ownership of a property whilst rental income is what the tenant pays expressed as the total annual income received from letting the property divided by the capital value of the property when it was acquired.
If you choose to hire agents to help you find suitable renters then you have to keep in mind that you need to pay letting agent fees and they do charge big. There are also insurance premiums to think about, expenditures for replacing fixtures and fittings as necessary, maintenance costs, taxes and service charges on leasehold properties and taking into account periods when you have no tenants. Renting out your property entails you to do sensible budgeting each month.