Life circumstances change. Maybe you have been transferred to another city for work. Maybe you have inherited a home. Maybe you have moved in with a partner and your old place is sitting empty. Whatever the reason, converting your home into a rental property is a significant financial decision, and getting it right from the start makes all the difference.
Saskatchewan's rental market, particularly in Regina and Saskatoon, has shown consistent demand for quality housing. But transitioning from homeowner to landlord involves more than putting a "For Rent" sign on the lawn. There are legal requirements, insurance changes, tax implications, and operational considerations that need to be addressed before your first tenant moves in.
This guide walks through the key steps of converting your home into a rental property in Saskatchewan.
Step 1: Evaluate Whether Renting Makes Financial Sense
Before committing to the landlord path, run the numbers. Converting your home into a rental is only worthwhile if the income justifies the costs and effort involved.
Key Financial Considerations
- Mortgage: If you have an existing mortgage, check with your lender about converting the property to a rental. Some mortgage agreements include occupancy clauses that require you to live in the home. Switching to a rental may require refinancing or notifying your lender, and your interest rate could change.
- Rental income vs. expenses: Estimate what you can charge in rent (more on pricing below) and subtract your carrying costs: mortgage payments, property taxes, insurance, maintenance, utilities (if included), and management fees if you plan to hire a property manager.
- Cash flow vs. appreciation: Some rental properties generate positive monthly cash flow. Others break even month to month but build equity over time through mortgage paydown and property appreciation. Understand which category your property falls into before proceeding.
- Vacancy costs: Budget for vacancies. Even in a strong market, you should plan for at least one month of vacancy per year when calculating your annual return.
Step 2: Understand Saskatchewan's Legal Requirements
Operating a rental property in Saskatchewan means complying with The Residential Tenancies Act, 2006, which governs the relationship between landlords and tenants in the province. Key obligations include:
Lease Agreements
You are required to have a written lease agreement that covers essential terms such as rent amount, payment schedule, security deposit, lease duration, and the rights and responsibilities of both parties. Saskatchewan provides a standard form lease, but many landlords use customised agreements that address additional details like pet policies, maintenance responsibilities, and guest rules.
For guidance on what to include, see our article on essential rental agreement clauses.
Security Deposits
Saskatchewan law caps security deposits at one month's rent. The deposit must be returned within seven business days of the tenant vacating the property, unless deductions are being made for unpaid rent or damage beyond normal wear and tear. Landlords must provide an itemized statement for any deductions.
For a full overview, read our guide on security deposit laws in Saskatchewan.
The Office of Residential Tenancies (ORT)
The ORT is the body that handles disputes between landlords and tenants in Saskatchewan. If a disagreement about rent, deposits, maintenance, or lease terms cannot be resolved directly, either party can file an application with the ORT for a hearing. Familiarising yourself with this process before you need it is a smart move for any new landlord.
Municipal Bylaws
Beyond provincial legislation, your property must comply with local bylaws. In Regina and Saskatoon, these cover zoning (ensuring your property is in a zone that permits rental use), fire safety, occupancy limits, exterior maintenance, and noise. If you are considering adding a basement suite to increase rental income, you will need to verify that your property meets the relevant building codes and zoning requirements.
Step 3: Update Your Insurance
This is one of the most overlooked steps, and one of the most important. Your standard homeowner's insurance policy does not cover a rental property. If a tenant or their guest is injured on the property, or if the property suffers damage while occupied by a tenant, your homeowner's policy may deny the claim entirely.
You need to switch to a landlord insurance policy (sometimes called a rental property insurance policy). This type of policy typically covers:
- Property damage: Fire, storm, vandalism, and other perils.
- Liability: If someone is injured on the property and you are found liable.
- Loss of rental income: If the property becomes uninhabitable due to a covered event (such as a fire) and you lose rental income during repairs.
You should also require your tenants to carry tenant's insurance (renter's insurance). This covers their personal belongings and provides them with liability coverage. It is increasingly common for landlords in Saskatchewan to make tenant's insurance a condition of the lease.
Step 4: Prepare the Property
Before listing your home for rent, you need to shift your mindset from "my home" to "my investment." That means making decisions based on durability, appeal to a broad tenant market, and return on investment, not personal taste.
Repairs and Maintenance
Address any deferred maintenance before a tenant moves in. This includes:
- Plumbing: Fix leaky faucets, running toilets, and slow drains.
- Electrical: Ensure all outlets, switches, and fixtures work. Replace any with exposed wiring.
- HVAC: Service the furnace and air conditioning system. Replace the filter. In Saskatchewan, a reliable furnace is non-negotiable.
- Exterior: Repair damaged siding, broken fencing, cracked sidewalks, and any safety hazards.
- Smoke and carbon monoxide detectors: Install them on every level and test them. This is a legal requirement.
Cosmetic Updates
You do not need to gut-renovate the property, but a few updates can help you attract better tenants and command higher rent:
- Paint: A fresh coat of neutral paint (light grey, warm white) covers scuffs and makes the space feel clean.
- Flooring: If you have high-maintenance flooring like light carpet, consider replacing it with laminate or luxury vinyl plank. These are durable, easy to clean, and tenant-friendly.
- Fixtures: Updating dated light fixtures, cabinet hardware, and faucets is relatively inexpensive and makes a noticeable difference.
- Appliances: If your appliances are old or unreliable, replacing them before a tenant moves in avoids the hassle and cost of emergency replacements later.
Deep Cleaning
Have the property professionally cleaned before listing it. This includes carpets, windows, appliances, and HVAC ducts. A clean property sets the standard for how tenants are expected to maintain it.
Documentation
Conduct a thorough move-in inspection and document the property's condition with photographs and written notes. This documentation is essential for resolving security deposit disputes when the tenant eventually moves out.
Step 5: Set the Right Rental Price
Pricing your rental correctly is critical. Too high, and you sit vacant. Too low, and you leave money on the table every month.
How to Research Rental Rates
- Online listings: Check current listings on platforms like Kijiji, Facebook Marketplace, and Rentals.ca for comparable properties in your neighbourhood. Look at properties with similar size, condition, and amenities.
- CMHC Rental Market Report: Canada Mortgage and Housing Corporation publishes annual rental market data for Regina, Saskatoon, and other Canadian cities. This data includes average rents by unit type and vacancy rates.
- Property management input: A local property management company can provide a rental market analysis based on their portfolio data and knowledge of the area.
Factors That Affect Rental Price
- Location: Proximity to schools, transit, shopping, downtown, and major employers.
- Size: Number of bedrooms and bathrooms, total square footage.
- Condition: Updated kitchens and bathrooms command higher rents than dated ones.
- Amenities: In-suite laundry, parking (garage vs. pad), fenced yard, air conditioning, pet-friendliness.
- Utilities: Whether utilities are included or excluded affects the listed rent.
Step 6: Screen Tenants Thoroughly
The tenant you place in your property will determine the quality of your experience as a landlord. A thorough screening process is not optional; it is essential.
A strong screening process should include:
- Credit check: Reveals the applicant's financial history, including outstanding debts, collections, and payment patterns.
- Employment verification: Confirms that the applicant has stable income sufficient to cover rent. A common guideline is that rent should not exceed 30% to 35% of gross monthly income.
- Landlord references: Previous landlords can provide insight into how the applicant treated the property, whether they paid rent on time, and whether there were any issues during the tenancy.
- Background check: Screens for relevant criminal history.
For a detailed guide on finding quality tenants, see our article on how to find the best tenants for your rental property.
Step 7: Understand the Tax Implications
Converting your home to a rental property has significant tax consequences. You should consult with an accountant who understands rental property taxation in Canada, but here are the basics:
Rental Income Is Taxable
All rental income must be reported on your Canadian tax return. However, you can deduct eligible expenses to reduce your taxable rental income, including:
- Mortgage interest (not the principal portion of your payment)
- Property taxes
- Insurance premiums
- Maintenance and repair costs
- Property management fees
- Advertising costs
- Utilities (if you pay them)
- Accounting and legal fees related to the rental
Capital Cost Allowance (CCA)
You may be able to claim CCA (depreciation) on the building (not the land) as an expense. However, claiming CCA can trigger a recapture when you sell the property, which increases your tax bill at that point. Discuss this with your accountant before claiming CCA.
Change in Use Rules
When you convert your principal residence to a rental property, the Canada Revenue Agency (CRA) treats this as a deemed disposition. This means you are considered to have sold the property at its fair market value on the date of conversion and immediately reacquired it at that same value. This establishes your cost base for future capital gains calculations.
You may be eligible to elect under subsection 45(2) of the Income Tax Act to defer this deemed disposition for up to four years, which can be advantageous if you plan to move back into the property. Again, consult your accountant.
GST/HST Considerations
If your rental property is residential, you generally do not need to charge GST on rent. However, if you provide short-term accommodation (less than 30 consecutive days), GST may apply. Saskatchewan's PST does not apply to residential rent.
Step 8: Plan for Ongoing Maintenance
Once the property is rented, your responsibilities do not end. As a landlord in Saskatchewan, you are legally required to maintain the property in a good state of repair and fit for habitation under The Residential Tenancies Act, 2006.
Build a Maintenance Budget
A common rule of thumb is to set aside 1% to 2% of the property's value annually for maintenance and repairs. For a property valued at $300,000, that is $3,000 to $6,000 per year. This covers routine maintenance, seasonal upkeep, and a reserve for unexpected repairs.
Seasonal Maintenance Checklist (Saskatchewan-Specific)
- Fall: Service the furnace, clean gutters, seal windows and doors, winterise outdoor taps, arrange snow removal.
- Winter: Monitor heating systems, check for ice dams, ensure walkways are cleared (City of Regina and City of Saskatoon bylaws require timely snow and ice removal from sidewalks).
- Spring: Inspect the roof and exterior for winter damage, service the air conditioning system, check the sump pump.
- Summer: Maintain landscaping, inspect the foundation for cracks, check exterior paint and siding.
Emergency Repairs
Have a plan for emergency repairs, particularly in winter. A furnace failure at minus 30 degrees Celsius requires immediate action. Maintain a list of reliable, licensed contractors for plumbing, electrical, and HVAC emergencies. If you are not local or not available to respond quickly, a property management company can handle this on your behalf.
Should You Manage It Yourself or Hire a Property Manager?
Self-management works for some landlords, particularly those with a single property, local availability, and the time and temperament to handle tenant communications, maintenance calls, and administrative tasks.
But if you are converting your home to a rental because you are moving away, or if you do not want the day-to-day responsibilities of being a landlord, a professional property manager is worth considering. A good property manager handles tenant screening, lease management, rent collection, maintenance coordination, inspections, and legal compliance, giving you the benefits of property ownership without the operational burden.
If you are converting your home into a rental property in Regina or Saskatoon and want professional guidance through every step, from pricing and preparation to tenant placement and ongoing management, GoodDoors Property Management can help. Our team has managed 600+ properties across Saskatchewan since 2017, and we are licensed by the Saskatchewan Real Estate Commission to ensure your investment is in qualified hands.
Disclaimer: This blog is not a substitute for professional legal advice. If you need further help, please consider hiring a legal expert or an experienced property management company based in Saskatchewan like GoodDoors Property Management.
