August 03, 2014
One may believe that more services attracts more renters. I use to believe that. To me, I thought it would be more cost effective if I manage the Internet and cable for my renters since I knew how to get the best deal. Then, I could increase the rent because I was providing Internet and Cable TV.
I was right in that I knew how to get the best deal, but I was wrong in that it was more cost effective.
Cable and Internet is not an expense that is tax deductible! The Ontario provincial government does not allow you to claim this expense because they do not believe a rental property needs Cable and Internet. Hence, although I pay taxes on the rent income, I was not able to claim the expense of the Internet and Cable that my renter was using.
So what is the strategy?
Now, if you are living with your tenant, you could offer free Internet because really, my renters seem to find Internet as a necessary part of life. (In fact, they claim immediately when the Internet is down. And I must fix it fast.) The other option is to split the Internet and Cable bill as part of different expense, which is not part of the rent.
I chose to just offer the Internet for free because it was just easier to maintain. However, when I moved out of the house, I did not provide them with the Internet or Cable service. They were on their own. Choosing to split the cable and Internet bill was just an additional maintenance that I didn't care to waste my time on.
Depending on how open you want your target client to be, offering free Internet and Cable would appeal to short term Tenants. Offering Cable and Internet does not appeal to long-term tenants because if they have intentions to stay there for a longer period, then they wouldn't mind making the effort to get the services that fit their needs.
If you have any questions or conerns about these articles or you would like to comment on them, please