Renting an apartment while on deployment?

[Harbl_the_cat]

Hello,

I am a Reservist from Calgary and I am signing up for Roto 1-08.  I own an apartment in Calgary and since the build up training is not in Calgary, I'm planning on renting it out.  I've never been on Tour before, but the common knowledge I've heard from everyone else is "don't plan on being able to manage your finances."

To that end, I want to know if anyone has any advise or experience about how a deployed soldier can have their property managed while on tour?

My plan is to either have a family member act as the land lord while I'm gone to collect rent, pay the mortgage, inspect the place, etc. or to hire a property management company to handle all those administrative details.  With that, though, does anyone have any positive/negative experience with any companies in Calgary?

Also, I'm planning on making future tenants sign an 18 month lease with a 2 month damage deposit (as the place is fully furnished).  Does this sound reasonable?

Does anyone know the effects on taxable income for collecting rent while deployed/on training?

Finally, does anyone have any other similar personal experience they think might be useful?

Thanks!

 

[geo]

Once you are deployed, your personal income is`"tax free".  your rental income will be a taxable benefit - from which you will be able to deduct maintenance / upkeep expenses & interest on mortgage.

If you have immediate family who are prepared to handle your finances, fine and good but, if their heart is not into it, their "unwilling" participation isn't worth the trouble.
I would presume that your Apt is a condo & that there is a management firm that looks after the building - why don`t you talk to them? am certain they will be interested - for a fee...

2 mths damage deposit? - nice if you can get it BUT, can you get it?

18 Mth lease?  is that how long you will be away for Trg & deployment?

 

[Shamrock]

I've subletted my condo in the past and it can become a f*cking nightmare... or can have absolutely no problems.  Bone up on some things before you do it:

1.  LAWS!  Tort laws, including contract laws and the Landlord and Tenant's Act (or whateverits name is in your location).  Draft up a lawful and binding contract that will be acceptable to both. Include termination clauses and a no-extension clause if you're planning on returning to it after you get back.  If you're going to buy a new place when you return, think about adding an incentive to purchase for the renter.

2.  Repairs!  The owner and not the tenant will be responsible for these.  You may be able to square something away with the tenant saying "contact these people for repairs and submit bills to me, I will reimburse."  If that's the case, put it in writing so they'll know you are legally bound to it.  Add in a normal use clause to cover your own ass (so they're on the hook to repair the sink they threw a fire extinguisher through).  Check also to see if you're responsible for repairs to the furniture should it be damaged through normal use.

3.  Condo board.  Some don't allow renters so make sure you clear it with the board first.

4.  Damage deposit is as you set it.  Ensure you have clearly stated in your contract what will be withheld and what will be returned.  The higher it is, the less tenants you'll attract... but you're only trying to attract one.

5.  Rent.  Set it competitively but not at a loss for yourself.  My rent was set at mortgage + condo fees + reasonably expected electrical usage.  In the end, had a $5 profit (but a year's worth of equity).

6.  References.  Don't be afraid to ask for them.

7.  Furniture.  I'd be really, really, really careful about this.  Most people will have their own furniture, so you'll have to consider what sort of person will be renting a furnished place on a finite termed lease.  Divorcee... student... terminally irresponsible... all three...  Also, make sure you take a very good inventory of your stuff before you go.  No matter what, some of your stuff will have to go into storage -- no tenant is going to want to share closet space with your retro 80's attire.

 

[AmmoTech90]

Try a property managment company.  We've got a guy at work who owns a few properties around the world.  He uses a property mangement company to look after them.  They get tennants, manage repairs, etc, all for a cut of the rent.  He still makes money on them.

Google property mangement Calgary and few pop up.

D

 

[Shamrock]

Stay away from C-Era, assuming they haven't declared bankruptcy and re-emerged as a new entity.

 

[camochick]

You can't charge more than a months rent for a damage deposit.

The Alberta Tenancy act states that "43(1)  A landlord shall not require a tenant to provide a security deposit that is greater than one month’s rent under the residential tenancy agreement or that is greater than the rent that would be payable for one month under the residential tenancy agreement if the rent were payable monthly"

This is a copy of the act. Since my old landlord screwed us over I've become very familiar with it.
http://governmentservices.gov.ab.ca/index.cfm?fuseaction=section:landlords:legislation

 

[geo]

heh.... had many dealings with landlord & Provincial rental board while I was stil a tenant. 

 

[dapaterson]

Find an excellent RMS clerk and discuss this ahead of time.  Certain benefits are payable to a member who maintains reposnsibility for a primary residence; if you rent your home or sublet a lease you may find yourself ineligible for some items.

The rules for attach-posting and prolonged TD are seemingly in a constant state of flux - learn the rules in advance to avoid hurting yourself.

 

[Harbl_the_cat]

Thanks for all your incites, they were very helpful.  Especially the one about Damage Deposit (I didn't know it was capped at 1 months rent).

The Calgary housing and labour market being what it is, I don't think there will be any sort of shortage of responsible professionals/tradespeople from out East not wanting to relocate all their possessions; and my property and furnishings are perfect for yuppie couples (thanks a lot Mr. Bush for making the US dependant on our oilsands!)

I think I'll set my rent to my mortgage, cable/electricity and condo fee's and I'll definitely look up contracts and tort laws.  I don't have many personal effects, since I was (and still am) planning on joining the Reg Force and don't want to be bogged down with useless possession I'll never use, need or have space for; but the ones I do have, I'll leave with my parents.

The training and deployment are 18 months, yes; and I am close enough to my family that I have absolute faith and trust in their ability to manage it for me.  If they're unwilling, I'll go with the property manager for the complex.

How about property insurance? I'll be leaving all my furnishings (couch, entertainment unit, bedroom suite x2, kitchen set) and appliances.  Does maintaining my property insurance protect me from what my tenants might do?  Can I put conditions on my contract that set how I can deduct from the damage deposit what my tenant might do to them (normal wear on my furniture is fine, I'm worried about a Wii-mote's or Whiskey bottle's through my TV or wall).

As for rent, this is a bit unrelated, but I currently have a roommate who I plan to evict (3 months notice by law, right?), but is the rent I charge him considered taxable income?  I heard somewhere that since (right now), he's occupying my primary residence, that income isn't taxable.  Is this true or false, and does anyone know where one can look up information related to taxes and rent?

I'm sorry if I seem a bit ignorant to these things, I'm a first time home buyer (last August) and this is my first tour.

Thanks again!

 

[niner domestic]

You need to make an appointment with either a tax accountant, lawyer or property management firm to have these questions answered and it would be in your best interest.  As suggested, I'd speak to your RSM and your Career Manager for directions on whether the CF has any programs to assist you in your property management while on deployment.   

*and a small note, if your are leaving your property rented and heaven forbid anything should happen to you in which your will has to be executed, you had best have included a clause to deal with your tenants.  Tenants may cause a legal nightmare for your executor/trix. 

 

[geo]

check your insurance policy AND have your insurance agent look at your policy to make sure that you are not invalidating your insurance policy by your not attending to the premises on a daily or weekly basis.  There is probably an additional premium when you are dealing with rental property & your toys.

rental income is taxable.  You may be able to write off some expenses against that income BUT it is earned income & taxes are due.

 

[tannerthehammer]

I would also ask a future tenant for a police record check and if it comes up clear, you would re-imburse the fee which is likely around $25 (in Ontario)....At least it gives you a bit of an idea of who will be living in your home and using your things and you will know who the person is for sure incase they give you a fake name...

 

[Jacqueline]

Not sure if this is the proper place for this....

I was just wondering how you pay your rent when you're deployed.

 

[AJFitzpatrick]

If you trust your landlord, postdated cheques
Bear in mind that banks don't check dates of cheques for small amounts (for banks that is)
I don't if you would get hit with an NSF charge if the cheque was bounced before its date.