We have been active in purchasing rental properties over the past few years. There are a lot of misconceptions when listing a rental property. First of all it has to be legal. Just because you build an apartment in the basement doesn't make it legal. We make it quite clear when a potential seller contacts us about listing their rental property. We are going to check with the county to make sure it is a legal rental property. Our job as REALTORS is to protect our clients; whether they are a buyer or seller. A bank will only lend money on the legal portion of a property. An appraiser will only appraise the legal part of a property.
In the Annapolis Valley there are several duplexes, triplexes, and fourplexes that are listed that are not approved for that many units. In our advertising we always state that we are looking for legal rental units, and that we are going to check. We have several active clients that are looking for rental (investment) properties. Every rental property that gets listed on MLS goes through a thourough checklist by our team the day it goes on the market. We call the county to ensure it is legal (or legal non-conforming). The second step is we have a spreadsheet in which we put in the rental numbers, and expenses to calculate what the return on investment would be. For instance, if a duplex is listed for $250,000 and is renting each side for $750 per month, it isn't going to pass our checklist and doesn't get passed on to our buyers.
If you are thinking about purchasing a rental property or selling one; make sure your REALTOR know their way around rental properties. Not everybody that is a licensed salesperson deals in all types of properties. Ask for references!