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Renting a home has many advantages and disadvantages. In this article, I will focus specifically on the main advantages to renting a home.

1. Flexibility – When you rent a home, you generally have more flexibility to move. Homeowners have to worry about selling their home, which may take months. Selling a home can be very difficult in a declining real estate market. Homeowners also have to be aware of any fees they may inquire if they break their mortgage agreement early, when they sell their home.

2. Potential Savings – Sometimes the cost of owning a home is more expensive than the cost of renting a home. Homeowners have various expenses that renters do not (e.g. mortgage payments, property taxes, condo fees, repairs, etc.).

3. Startup Costs – Unlike homeowners, renters do not need to save a large down payment to purchase a home. At most, a renter will be asked to pay a damage deposit (usually equivalent to one months rent) before they move in.

4. Repairs & Maintenance – Renters do not need to worry about the cost of major repairs to their home. For example, if a furnace stops working in a rental property, its repair is generally the responsibility of the landlord to fix.

5. Scouting the Neighborhood – Renting a home allows a renter to live in a neighborhood before committing to stay there long term. This can be especially helpful when a renter is moving to a new city or neighborhood that they are not familiar with.

Renting a home is a great option for those who need to maintain flexibility in terms of their living arrangements.  For example, if you have a temporary job, or your job requires you to move frequently, then renting a home will provide you with the flexibility you need.  Renting a home is also a great options for those who want to live in a neighborhood first, before they commit to live there long term.

Calculating how much rent you can afford is similar to calculating how large of a mortgage payment you can make.  One very simple rule of thumb is to spend no more than 30% of your gross monthly income, after expenses have been deducted, on your monthly rent.  Below is a simple example to illustrate this calculation.

Step 1 - Identify Your Monthly Gross Income

If your gross income is $60,000 per year, then your monthly gross income is $5000 per month.

Step 2 – Determine Your Total Monthly Expenses

For example:

$ 400 - Car Payment
$ 600 - Credit Card
$ 500 - Child Support
————
$ 1500 - Total Monthly Expenses

Step 3 - Calculate Your Recommended Maximum Monthly Rent

$ 5000 - Gross Monthly Income
$ 1500 - Monthly Expenses
————
$ 3500

Now, multiply your remaining gross income by 30%.

$ 3500 x 30% = $1050

In this scenario, it is recommended that you do not spend more than $1050 per month on rent.

You can use this simple calculation to determine how much you can spend on rent each month.  There are many online calculators you can use to make similar calculations.

In an unfortunate circumstance, a landlord may need to evict a tenant.  The eviction process formally begins when the landlords provides the tenant with an eviction letter.  Listed below are steps to follow when writing an eviction letter.

Step 1 - Review the rental agreement between the landlord and the tenant.  Identify the clauses in the rental agreement that have been violated by the tenant.

Step 2 - Each province may have specific laws regarding the eviction process.  Review your provincial laws in order to ensure that the infraction committed by the tenant is covered.  This step should be completed before writing an eviction letter.

Step 3 - Begin the eviction letter with the date, the landlords name and address, and the tenants name and address.  The date on the eviction letter should correspond to the date the eviction letter will be delivered to the tenant.

Step 4 - In the eviction letter, clearly identify the address of your rental property and the reason the tenant is being evicted.  For example, a tenant may be evicted for:

• Failing to pay rent
• Severely damaging the rental property
• Having a pet, when it is prohibited by the rental agreement
• Excessive load noise
• etc.

The eviction letter should also contain:

• Dates when the infringement occurred
• References to the specific clauses in the rental agreement that were violated
• Mention of any previous warnings given to the tenant

Ensure that the eviction letter states the date the eviction is effective on.  For example, if the eviction is effective in 30 days, clearly state this date.  Do not leave any room for misinterpretation.

Step 5 – Conclude the eviction letter by signing it.  You can also have your eviction letter reviewed by a legal authority for correctness.