My first rental property?

[93VR6]

Looking for any information I can read up on about rental properties in Alberta and anything else you guys would recommend I familiarize myself with.

Basic situation here, I'm 25 and am currently renting a condo for 500 a month all in living with a room mate. I currently have no debt, credit or otherwise, own my truck (07 xterra) which I need for work. I have saved up enough for a 20% down payment on a place in my price range and a few I have been looking at are currently rental properties with 2 suites in them, main floor and basement. Is it a good or bad idea to be living in a place that I am also renting out or would it be better to continue living in my condo since it's cheap and renting out the entire house until I get tired of my current living arrangement.

Shoot me any questions you have or any suggestions, I am very new to this and am really trying to learn as much as I can.

Also want to add that I am a consultant and am currently incorporated, would it be in my best interest to buy the house under the corporation or personal?

Thanks Beyond.

[f150mikey060]

This would be a good place to start

http://www.cmhc-schl.gc.ca/en/co/reho/yogureho/fola/fola_001.cfm

In my opinion it isnt a bad idea, I rent the main floor of my home and live in the basement. As long as you are fine with having somebody living above you this is optimal since you can typically charge a lot more for the main floor rental. Since you are used to living in a condo it shouldnt be any different having someone live above you or below you. Im no financial advisor however I wouldnt recommend putting your primary residence that you live in under a corporation. If you owned multiple properties then yes, those could go under the corp. However if your company were to go bankrupt for whatever reason atleast they wont take your primary residence and you will still have a place to live.

[Toma]

If buying a place, room mates are far better than renting.

When you rent something out, you are essentially making the rental property the renters HOME, and giving up possession of the dwelling....which means they have a lot of rights. This can be a pain when things do not work out.

With room mates, none of the landlord tenant stuff applies, since you never gave up possession of your home, you can put their stuff on the lawn with no notice if shit goes sideways.

I did this when I started out. My GF does it now, and I think she gets something like $550 a room.

Something to keep in mind. Plus the bonus that you may end up with a couple hot room mates ;) Don;t be a pushover though, set the rules up front, and err on the stricter side. Limit how many friends can be over and how often, tolerance for drinking, drugs etc etc.

[90_Shelby]

Toma,

Regarding tenants rights, when are the living accomodations defined in the sense of a "landlord - tenant" relationship vs a "roomate"?

I rent out my basement which is suited but it is a "nonconforming suite" meaning we are legally allowed to have a suite but it does not meet all of the rules and regulations which would define the suite as legal. (No seperate furnace, no seperate entrance etc. etc.) As far as I'm concerned, my tenants are essentially roomates but they have their own kitchen and living space. We signed a contract stating the tenants responsibilities etc. etc. but how does the law view this situation?

Are they "tenants" protected by the landlord tenant act or are they roomates with no rights allowing immediate eviction if things got ugly? Are these two situations defined by a rental agreement or the actual accomodations?

With all of that being said, I would recommend renting out a basement suite but be very selective of your tenant/roomate. We priced our basement on the low end so we could be more selective due to a higher number of inquiries. We've had great luck and the extra cash every month is nice.


EDIT : Just found this

Warning

When you share living space with the owner of the property, the Residential Tenancies Act does NOT apply to you. This means that most of the information contained on this site is NOT applicable to you.

http://tenant.landlordandtenant.org/becomingtenantfacts/room.aspx


But how do they define "living space"?

[Toma]

Originally posted by 90_Shelby
Toma,

Regarding tenants rights, when are the living accomodations defined in the sense of a "landlord - tenant" relationship vs a "roomate"?

I rent out my basement which is suited but it is a "nonconforming suite" meaning we are legally allowed to have a suite but it does not meet all of the rules and regulations which would define the suite as legal. (No seperate furnace, no seperate entrance etc. etc.) As far as I'm concerned, my tenants are essentially roomates but they have their own kitchen and living space. We signed a contract stating the tenants responsibilities etc. etc. but how does the law view this situation?

Are they "tenants" protected by the landlord tenant act or are they roomates with no rights allowing immediate eviction if things got ugly? Are these two situations defined by a rental agreement or the actual accomodations?

With all of that being said, I would recommend renting out a basement suite but be very selective of your tenant/roomate. We priced our basement on the low end so we could be more selective due to a higher number of inquiries. We've had great luck and the extra cash every month is nice.


EDIT : Just found this

Warning

When you share living space with the owner of the property, the Residential Tenancies Act does NOT apply to you. This means that most of the information contained on this site is NOT applicable to you.

http://tenant.landlordandtenant.org/becomingtenantfacts/room.aspx


But how do they define "living space"?

honestly, not sure on the legal definition there.

[slammedfc]

i rent my basement out. cuts costs hugely. definatly a good plan in the end you own the house and arent paying someone elses mortgage

[JBreaks]

Consider that the interest on your mortgage will likely be in the range of $600/month. You will also have property taxes, insurance and possible community associate fees. Utilities will fluctuate based on seasons and each parties living habits and the electronics they bring with them. Determine if the economics are actually in your favour to own and don't plan to depend on rental income, because you will more then likely not have it 100% rented for the duration of your mortgage. IMO $500 all in will be tough to match.

[KappaSigma]

Didnt bother to look it up but if you rent a portion of your home and claim it...could be a change of use and impact tax situation when you go to sell it...

Pat