CRA form - the one the government uses when you report your rental income and expenses

Here is the form that Canada Revenue Agency uses when calculating the income and expenses.  Print it off and use it as a guideline to know what kind of expenses are allowed.  If you drive, make sure that you keep track of your kilometers in the beginning of the year and take note of what it is at the end of the year.  Calculate how far the rental property is from your home and the number of trips that you take and you can deduct the expenses for running the car, gas, car wash, insurance, license renewal ( plates), depreciation, car payments, oil changes and any other expenses that you incur insofar as your car is concerned.
In addition your have all the regular expenses, mortgage, interest, ( only interest can be claimed in Canada), utilities, legal, office, accounting expenses etc.
This form will be a great outline for those of you who are just starting out.  If you have a specific question, feel free to post it on the blog and I will try and answer it asap.

How to improve your chances of collecting a bad debt from a tenant Part 1

• 1) Complete application.  Don’t settle for anything less than an application that is filled out completely!  Itsounds simple, but you would be amazed how many rental applications we see as a collection agency that arrive at our office half empty.  A partially filled in application will rob you of future income. 
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2)  A verified Social Security Number, previous address verification and three personal references are a must!

• The previous address and Social Security Number will help identify a debtor when he or she skips and is living elsewhere. 
• The three personal references could be instrumental in helping your collection agency find them and collect any money owed.
  
  

3)  Bank Accounts!

Make a photocopy of a prospect’s check, and the rent check every month. 

• That way, you will have the right information for recovery, and you may discover a secondary bank account or other changes crucial to collection. 
• If this person skips owing money, a record of their current back account numbers can spell the difference between successful collection and no collection at all
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4)Check Their Driver’s License.  Make a photocopy of the prospects’ driver’s license and Social Security card.  It is not uncommon for a bad ex-tenant to avoid a bad reference by claiming identity theft and saying he or she “never lived there”.  Copies of these documents will be crucial in identifying the debtor and collecting your money

5) Avoid the “Company Name” Scam.  If your prospect says “I would like to put the apartment in my company’s name,” your mind should hear “RED ALERT! “ It is a common scam for people with bad credit or rental history to try to rent under a company name to prevent you from running their credit. 

• It is often far more difficult to collect a debt from a company than it is from an individual. 
• Even if the ‘company’ exists, you must go through proper channels to bind it to the lease.  If you do write a corporate lease,  ALWAYS acquire the proper documentation to show the company is in good standing, and the person signing the lease is authorized to do so.
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• 6) Background Check Co-Signers.  One way to rent to someone with questionable credit or rental history is to require a co-signer. But avoid the common mistake of accepting a co-signer without checking their credit and rental history. It is crucial to collection to have the co-signer complete a rental application and sign an iron-clad agreement.  In fact, it is extremely important for every adult moving into the apartment to complete an application and sign the lease.  This gives you far more leverage and ability to collect any future debts
  7) Signed Move-In Statement.  Congratulations, you found a new tenant!  No need to walk through the unit – we’re all friends here, right?  Wrong!  For both your and your new tenant’s protection, walk through the unit with them before they move in.  Make accurate and legible notes about the condition of the unit. ”I wish I had a nickel for every debtor who says the apartment was cleaner when he moved out that when he moved in.” A signed Move-In Statement can prove him wrong
  
  
  
  

How to spot a nightmare tenant Part 4

1) Tenants that are not earning any income
 If you are going to rent to students or other non earning tenants, then get the guarantor  to sign and check them out to make sure they can pay the rent.  This could be their parents or a spouse.
2) Talk less and listen more
Learn to ask questions and listen to their answers and how they answer.
Instead of talking about the property and how wonderful it is, ask questions of the tenants and everything that you want to know about them.   At the beginning they are willing to provide as much information which later on may be more difficult to get
3) Do regular investigations of the property and let them know on the onset that you will be doing routine checks on the property.
4) Follow your process and do not deviate.  Do your checks, get them to complete the application --all of it and get that missing information. Take your time and follow through on all the reference checks and request proof of income.
5) Ask to see two pieces of ID and make one of them a driver's license so that the previous address should match what they gave you on the application.  Also their name and date of birth should match.
You's be surprised how many people do not give their true identity.

In the end it is your property and it is up to you whether you want to rent it or not. After all, if you son't do your homework first, you will end up with the big headaches.