We own a condo in Florida and are thinking of renting it out for part of the year to bring in some extra income. However, we have heard we could run into some issues. What do we need to be aware of?
Many snowbirds rent out their U.S. vacation properties for part of the year, as it can be a great way to help cover costs or bring in a little extra income.
However, there are some matters you need to consider and deal with ahead of time to avoid running into unexpected problems down the road:
- Taxes: Any rental income you earn from your U.S. vacation property may be subject to both U.S. and Canadian income tax, so make sure you get advice from a cross border tax expert on the potential implications before you rent out your property.
- Rules: Condo’s and planned communities have homeowner associations with rules that govern your ability to rent out your property. Make sure you know the rules that apply to your property. Things to look out for include minimum rental period requirements, how many times you can rent out your property during the year, whether you need approval to rent out your property, pet and children restrictions and minimum age requirements for renters.
- Rental Agreements: Always enter into a written rental agreement with your tenants so the rental terms and obligations are clear. Use an agreement vetted by a real estate professional or lawyer to ensure you comply with local laws and have the necessary language and clauses to protect yourself if an issue arises.
- Payment: Whenever possible, be sure to get paid in advance and ask for a security deposit.
- Insurance: Notify your insurer that you will be renting out your property and make sure you (and your renter) have adequate coverage while your property is rented out, especially liability coverage.
- Property Management: You will need a property manager or caretaker to handle any issues your renters may have with the property and inspect it after they vacate.
- Personal Possessions: Remove or lock away any personal possessions, empty your fridge and food cupboard