Feb 25 | Posted by Barry Cohen

There are numerous reasons why homeowners choose to rent out their homes, ranging from not wanting to leave a home vacant during an extended vacation to waiting out a down market.  Renting out a luxury property requires even more due diligence than renting more conventional homes, and it is possible that the idea could become more trouble than it’s worth.  Many luxury properties have been, and continue to be, rented out for short term and even long term periods with absolutely no complications.

There are a number of factors that must be weighed out carefully before you put your luxury property on the market for rent and I thought it would be helpful to list some key points.

  1. Hire A Professional – A professional realtor is the best way to start.  An experienced realtor can explain the Landlord and Tenant Act and can save you valuable time and the unnecessary frustration of wading through documents full of legalese. An experienced realtor can assist you with advertising and showing your property to prospective tenants, making sure they are qualified and can even help draft the lease.  You need someone with expertise to ensure you are not renting your home to just anyone.  You will also need professional counsel from your lawyer to explain your rights and liabilities, and draw up the final lease.  Your accountant will be important to advise you of tax implications and the financial pros and cons regarding the rental.
  2. Understand Your Responsibilities – Being a landlord is one more responsibility you will need to fit into your life.  Repairs and maintenance are usually the landlord’s obligation, but there are reliable maintenance companies that can handle this.  You will have to set up a rental collection system with a contingency plan in case of default.  You should expect your homeowner’s insurance costs to increase, and you or someone you hire will have to check up on the tenant’s home maintenance skills from time to time.
  3. Competitive Price – Another area where a professional realtor can be invaluable is by using their experience and market data to obtain statistics for comparable rentals in your neighbourhood or community.  Underpricing a luxury rental may attract the wrong tenants and overpricing may mean the property will sit vacant, so deciding on an accurate price is crucial.
  4. Screening Tenants – Perhaps the most important aspect of renting your luxury home is selecting tenants that will respect your property and keep it in good condition as well paying the rent on time.  A realtor can screen and qualify prospects before they even see your home, and take care of initial showings saving you a lot of time.  References must be provided and thoroughly checked and a financial background and/or credit check is a must.  I even recommend insisting on a police report and criminal record check to my clients.

Renting your luxury home can be mutually beneficial, and usually results in happy endings.  It is your home and a valuable asset so use caution, act wisely and enlist the help of professionals – you don’t want to jeopardize your home, your equity or your investment.

If you are considering renting your luxury property, I would be happy to meet with you, answer your questions and use my expertise in this field to assist you every step of the way.