Before you rent

Thinking of adding to your income by renting out part of your home? Renting extra space can definitely add to your cash flow and provide a good return, depending on the rental market in your area.

But before you make the decision, be aware that becoming a landlord is serious business. Here are some of the things you should be aware of and investigate before you start advertising:

Space and type of rental
There is a large legal difference between renting and taking on a boarder.  When you take in a boarder you do not have the same obligations as you would if you were renting out a self-contained unit. You also may not have the same protections.  

It’s important to check both provicial and municipal regulations for renting part of your home. If you own a condominium you may also be suject to additional rules about renting. In some areas you may not be allowed to create a second suite; in others the rules may be more relaxed if you are renting out a suite in your primary residence.  Be sure you understand the fire safety, building, and housing requirements that you will have to meet.

Insurance issues&l;/trong>
Check with your insurance company about how renting out part of your space can affect your policy.  Be sure you have adequate coverage for liability.

Tax and other financial considerations
You will have to declare rental income as income, so be sure that you understand any tax implications.  For the most part, adding a second suite shouldn’t affect your property value (and taxes), but if you are building an addition or renovating extensively, you may need to take this into consideration as well.

Remember that having an additional person in your home, particularly in a self-contained suite, is likely to add to your utility bills.  If you are taking on debt, such as a renovation loan, also be aware that you may have periods of vacancy and plan accordingly.

Sources of information for landlords and tenants:

A great national resource is the CMHC:

British Columbia: Residential Tenancy Office

Alberta: Landlord and Tenant services
Laws for Tenants in Albera:

Saskatchewan: Residential Tenancies Act

Manitoba: Residential Tenancies Branch

Ontario: Ontario Rental Housing Tribunal
Landlord’s Self-Help Centre

Quebec: Regie du logement

New Brunswick: Landlords and tenants in New Brunswick

Nova Scotia:
Residential Tenancies

P.E.I.: Residential Rental Property

Newfoundland and Labrador: Residential Tenancies Act:
Statuory conditions: