And why not? You don’t want to pay rent for a place you’re not living in. When it comes to short-term rentals, be it through a platform like Airbnb, or subletting to a friend, there are some things you need to know.

What your tenant insurance covers

Tenant insurance offers three coverage types:

●      Contents insurance – protects your valuables like furniture and electronics.

●      Liability – protection in case someone injures themselves in your unit, or you damage an adjoining property.

●      Living expenses – pays for your accommodation needs and related costs If you’re affected by an insured loss (e.g. flooding or fire).

Your own renter’s insurance policy only protects you, not the subletter. So, while you’re away, inform your insurer about the change and inform the sublessee to get their own renter’s insurance.

Renter’s insurance doesn’t cover water damage beyond a burst pipe or even identity theft. Still, you can customize and add coverage extensions to your policy to protect against those perils or simply make sure to take necessary precautions against them.

Questions your tenants insurance provider will ask

The initial questions when setting up a policy are where you live, the type of space and square footage, who lives in the home with you, the cost of all your contents, and when you need the policy to start.

If they don’t ask about subletting or using home-sharing programs, be forthright with that information. Lying to your insurance provider could lead to a denial of a submitted claim and cancellation of your policy. Subletting may also increase your premium because there is a higher risk of a claim while you’re away. If you sublet often, the riskier you are to insure, so keep it to a minimum if you can.

Check on rules and regulations

It’s important to know what overarching contracts are in place that may affect your decision. Whether it’s already in your lease agreement, rules set out by the condo board or municipal laws, you want to understand and comply with these rules before listing your apartment’s availability. Also, knowing the rules will make for a better impression with your landlord. For instance, according to Ontario’s Residential Tenancies Act, you can’t sublet for a rent that’s greater than your own.

Ask your landlord

The act also stipulates, “A tenant may sublet a rental unit to another person with the consent of the landlord.” So, you need to be clear and upfront with your landlord to avoid legal action or eviction. Tell them the reasons why you want to sublet. They may offer an alternative, or even say no, so prepare yourself, think of their questions and be ready with solutions. It’s important to show your landlord you care about the space, and the building. Don’t make it about making money, but rather a method to cover expenses while you’re away.

Speaking with your landlord is essential, and not only because it’s their property, but they’ll be taking on some risk themselves. Renter’s insurance covers your contents and if any injuries happen within your unit. Their insurance policy covers risks for the building. If your new sublessee injures themselves on the shared front steps, it falls to their landlord’s insurance policy, not yours. The more you help your landlord, the greater likelihood of success.

Create rules that work for everyone

Reach an agreement with your landlord about the sublet length, how many people can stay, and be sure to disseminate the rules to each tenant. Keep your landlord informed of any renter changeovers. Share valuable information like emergency phone numbers, evacuation plans, and where the fire extinguisher is located. Over-communicate with your guests about expectations and rules. Remember, this is a risk you’re taking on, and you want to avoid any problems.

What about home-sharing?

Here’s what you should know about home-sharing platforms, like Airbnb. Airbnb offers 2 types of insurance, each offering $1 million for third-party claims and property damage. Sounds pretty good; however, this Airbnb insurance isn’t for you, it’s for the homeowner.

And most home insurance providers don’t allow for short-term rentals. Airbnb themselves state on their website that their insurance doesn’t replace the homeowner’s insurance. Your landlord will need to check with their insurer if you want to go the Airbnb route. 

The real challenge is because you don’t have an insurable interest as someone who doesn’t own the property, so getting coverage in your name might not be possible. To make matters more complicated, you could even void your tenant’s insurance if you home-share without notifying your provider.

In the end

Subletting your apartment, like most income producing ideas, carries some risk. Seek to protect yourself for a smoother experience.

Guest post by Tyler Wade, Content Writer at Ratehub.ca. Ratehub.ca is Canada’s leading comparison site for mortgage rates, credit cards, bank accounts, investing products and insurance rates.

Subletting is the process of renting out your rental apartment/home or just a room in your rental home.

The process of going about this can feel like an impossible undertaking. Finding that perfect resident, who will handle your home and belongings with care, sometimes seems overwhelming.

After all, you’re trusting this person, whom you might not even know, with most of the contents of your life!

To begin, there are several logistics that need to be sorted out: Who will pay the rent and from what bank account? Who will take care of the utility bills? Make sure to have questions like these answered before taking the plunge into the world of subletting.

Ask Yourself Why

What are your reasons for subletting? Perhaps you will be away from your apartment rental for more than a month on business or pleasure. Or, perhaps you need to move to a different city for a semester to take some classes but still want to retain your home base.

Whatever your reasons, subletting is a viable option if you know you will be away for several months.

Get Permission

Prior to embarking on this great rental adventure, the first thing you must do – without question – is check your lease.

Is subletting allowed? If it is, what are the conditions? Ensure that you speak with your landlord to let them know that you plan to sublet to see if they have any objections or requirements.

Design the Ad

This is the fun part. Conceptualizing and creating a catchy and effective ad to advertise your rental suite to potential renters is crucial. Make sure you put your contact numbers wherever you list your apartment.

According to Kijiji, ads with photos garner double the attention than adds without.

Add as many photos as possible as well as amenities, nearby attractions, key features of the rental property/complex, information about the neighbours, and whatever else you think a renter would want to know prior to getting in touch with you.

Place the Ad

Once you have the go-ahead from your landlord, put your subletting ad online via websites you trust. Don’t forget to search wanted ads as well. ILS’s such as RentSeeker.ca, classifieds such as Craigslist and Kijiji are good options, as is Facebook and other Social Media channels. Rather than finding a stranger to sublet, maybe a friend – or friend of a friend – will want to rent your place. Prepare for lots of inquiries as well as showings and be patient. The right person will come along. Word to the wise: Don’t accept a resident who refuses to supply references or reasonable financial information

Set the Boundaries

However you find your ideal subletter, it is important to spell out the conditions of the sublet even if you end up renting to a friend. Important things to cover are:

• How much is the rent?
• Will your subletter pay the rent directly to you or to your landlord?
• Can the subletter bring in any of their own furniture or will they use yours?
• Is smoking allowed?
• Are guests allowed?
• Can the subletter bring in a pet?
• Who will pay the bills for utilities, cable television, Internet, etc.?
• Is parking included?
• What are the start and end dates of the sublet tenancy?

All of the above conditions, and any others you agree upon, should be written down and signed by all parties involved.

You may want to ask for a security/damage deposit as well, as this encourages your subletter to take good care of your rental.

Consider Consideration

During the actual sublet period, be courteous to your subletter and do not show up unannounced. After all, it is their home for that period and they have a right to be there without disturbances.

If you are worried there might be problems (they are throwing parties, have brought in animals you did not agree to and so forth), try speaking to them first via telephone or e-mail to resolve the issue. Additionally, don’t leave your apartment messy and hope that they will clean it up before you move back in!

If entered into with care and consideration, subletting your apartment can be a positive and rewarding experience. As with most things in life, trust your gut if something doesn’t feel right. Be safe and happy subletting!

Similar: Good Landlord and Tenant Relationship

Note: not all landlords allow subletting, as mentioned above, make sure to obtain permission in writing from your landlord prior to considering subletting your rental to ensure they allow it.

-The RentSeeker.ca Team