Discussions

Do people find they make much off renting out say a extra room in their place or when claimed on income tax is it profitable? Also would you recommend the idea of buying a more expensive property with an extra bedroom renting the bedroom out or just buying a cheaper property without doing that because in the end how much would you make off it? Thanks

I’ve been a landlord for many years.  
 
If it is your first time, my recommendation is NOT to have someone living in your home.  
 
No matter what...be sure to read & understand the entire Residential Tenancies Act ...”The Act”... ( https://web2.gov.mb.ca/laws/statutes/ccsm/r119e.php ) as most people do not know the rights & responsibilities of both renter & landlord.  
 
ALWAYS...ALWAYS have a written lease. A “verbal contract” is virtually unenforceable as it is almost impossible to prove (tv has lied to us about “verbal contracts” for years). Everything should be in writing as per The Act or it will be worthless under the law.  
 
Being a landlord can be a nice way to have an income but can be a huge pain-in-the-ass as well. There will be times renting will be unreliable, you won’t have renters, have non-paying renters, & bad renters who still have all their rights under the Act. You’d need to keep a fund for these times, for any repairs you’ll need to do as a result of renters, and for the tax man. I’d say the first 6 months of rent should go straight into a contingency fund... more if you can.  
 
Be sure to claim correctly on your income taxes as well, the CRA doesn’t take tax fraud very well.  
 
If you really want, buy something you can afford without a renter but has rental possibilities & try it.  
 
I believe most people do not have the ability to be in-home landlords.  
 
Edited by OutinBrandon, 2021-02-19 11:36:11

From my experience, it wasn’t really a money maker, although it did help with cash flow and paying the bills, etc. It is different for everyone, depending on your circumstances with how much you’re charging and if you have other tax deductions to offset this extra income for income tax time.  
 
I think you should determine what your goal is - if you’re looking for some extra income to help out with the monthly expenses then it might be worth it for you. Although you might find that it doesn’t return as much of a profit as you’d be hoping for in the long run.

Truly depends. I bought a three bed two bath home, my mortgage is 585 a month. I spent 2k renovating downstairs into a legal suite with own laundry separate entrance etc. It’s rented for 800 all utilities in. I’ve had wonderful tenants, i think living below your landlord keeps you on your best behaviour. We also just get along well on a personal and business basis, help care for each other’s dogs etc. We’ve got a great thing going on.  
 
Now, my separate home i’ve rented was a bloody nightmare. Bad tenants. They had the place such a pig sty they wouldn’t inform me of any repairs needed in the home as they didn’t want people inside. Once property tax, mortgage insurance, putting stuff away for damages was all said and done. I was barely breaking even a month. Once they moved out and i had to fix holes in the walls and replace all missing doors i lost money.  
 
As another posted said, ensure you are very very familiar with tenancy act.

You also need Insurance for being a landlord....