Small rental property business

Tenants pay monthly rent. Your down payment and costs are funded by your savings, a mortgage lender or a few partners.

Monthly rent covers the mortgage, taxes, insurance and repairs, and any surplus is your profit. You may also gain if the property's value rises over the years you hold it.

• Comfortable with budgets and spreadsheets
• Organised record keeping
• Fair and clear communication with tenants

• Landlord and tenant rules differ by province, including rent increase limits and eviction process, so check your provincial rules before buying
• Check whether your municipality requires a rental licence or has limits on secondary suites
• Landlord insurance is needed, and your lender may require specific cover
• Interest rates, vacancies and big repairs such as a roof or furnace can wipe out the monthly surplus, so keep a cash reserve
• Check how rental income and any gain on sale are taxed, and whether you need to register for GST/HST (residential rent is usually exempt, but confirm)

Estimates typically run around $50,000 to $150,000, depending on the property, your down payment and costs. Funding may come from savings, a mortgage lender or a few partners.

Estimated monthly revenue is typically around $1,500 to $4,500, depending on the properties you hold. Interest rates, vacancies and big repairs such as a roof or furnace can wipe out the monthly surplus, so keep a cash reserve.

Check your provincial landlord and tenant rules, including rent increase limits and eviction process. Also check municipal rental licence and secondary suite rules, landlord insurance and lender requirements, and how rental income, any gain on sale and GST/HST are treated.