January 10th, 2012
You decide to invest in residential rental properties in Ontario
With so much money at stake, you don’t take your investment lightly. You’ve looked into a variety of potential investments and decided to invest in residential rental properties in Ontario.
Now it’s time to cover all the bases to make sure you start out right and have a plan for success. You go through the categories, from finance to marketing.
Location, location, location
Being a careful and cautious investor, you spend months researching which area you want to buy in. After all, you know the old real estate adage ‘location, location, location.’
Financing
You work with your mortgage broker or bank to find out out how much you can spend and to make sure you can pull the trigger once you find the ideal property. You carefully work out all the numbers. You are pre-approved and know what your budget is.
Buying the right property
You work with a reputable Realtor to find the ‘right’ property in your targeted area. Now it’s on to carefully hiring contractors to make your rental property safe and attractive.
You feel you’ve done your due diligence and are on the right track
Carefull planning. Research. Hiring the right people and creating your team. Patience. A good business plan. You are on your way. Or so you think.
What do many Ontario landlords miss?
Many smart and professional Ontario landlords neglect one aspect of their business. The law. Before entering any industry it’s important for you to learn the laws governing it. Many landlords are not fully aware of the Ontario Residential Tenancies Act.
How difficult is it to simply rent out an apartment or my basement?
This isn’t Alberta. This isn’t British Columbia. This isn’t P.E.I. or Newfoundland. The laws in Ontario are complicated. Very complicated. Everything starts with the Ontario Residential Tenancies Act (RTA). Tenants are very well-protected under the RTA. This is especially so after the Ontario Liberal government’s amendment of the Act in in 2006. When the amendments were proposed, there was a consultation process with various stake-holders. Small scale landlords were not represented.
Don’t landlords have rights too?
Under the RTA, landlords have rights as well. However, you have to see the thinking of the people who made the laws. Tenants are essentially viewed as ‘victims.’ After all, they cannot afford to buy their own homes, right? Wait, you’re not buying it? Here’s more. Landlords are viewed as wealthy and powerful. Landlords can afford to hire over-priced paralegals and lawyers. Landlords can afford to wait 3-6 months to evict a non-paying tenant. You get the picture. Remember, small scale landlords were not represented during consultations to change the RTA.
Wow! Please tell me more about the Ontario Residential Tenancies Act.
The Residential Tenancies Act, 2006 covers most residential rental units in Ontario including mobile homes, care homes and rooming and boarding houses.
However, there are some situations where a rental unit may not be covered by the Act or certain parts of the Act.
For example, the Act does not apply if:
- the tenant must share a kitchen or bathroom with the owner, or certain family members of the owner;
- the unit is used on a seasonal or temporary basis.
Many of the rules about rent do not apply to:
- new rental buildings;
- non-profit and public housing;
- university and college residences.
Note these units are still covered by most of the other rules in the Act, such as maintenance and the reasons for eviction.
Note the Act does not cover commercial tenancies.
Where can I learn more about the RTA?
You can read the RTA here. Read it carefully. Twice. Daily.
