One more consideration when selling a property with a tenant living in it. https://t.co/LNB2nK85t9
— Landlord Relief (@LandlordRelief) September 2, 2017
Investing in Toronto real estate – tenants make it possible
The Toronto real estate market has been an “investors paradise” since 1996. What a run it has been! There are many people who have made a fortune. Even those who bought a home for sole purpose of living there have done well.
The importance of finding quality tenants
Successful real estate investors have had the problem of property management and the selection of quality residential tenants. If you are new to this, here are 10 principles for how to select residential tenants.
Buying and selling property with tenants
Many investors have bought property, found a tenant and then decided to sell. One of the most frequent questions is how to sell a property with tenants in it. Both the buyer and the seller are bound by the terms of an existing lease. There are many things to consider when buying or selling a property that has tenants living in it.
Getting vacant possession (AKA “evicting”) of property
There are many reasons why property owners wish to get “vacant possession” of their property. In some cases it is to sell. In some cases it is to move into the property themselves.
In general it is difficult to evict a tenant in Ontario. The Ontario “Residential Tenancies Act” gives them significant and substantial rights. The “Residential Tenancies Act” does contain a provision that allows a property owner to evict a tenant if the property is required for the owner’s personal use. Sounds good. But, as described in a recent article in the Toronto Star, there is a new provision of the Residential Tenancies Act that requires the landlord to pay the tenant one months rent of the landlord claims the property for his personal use. In other words, the landlord must pay the tenant in order to move into his own property.
— Real Estate Prep (@RealEstatePREP) September 1, 2017
The article referenced in the above tweet includes:
Ontario tenants will have more protection from eviction starting Friday.
That’s when new measures aimed at stopping landlords from turfing people from their rental units will take effect.
Effective Friday, when a landlord ends a tenancy to have family members move in, people evicted must receive compensation.
“When a tenant is evicted through no fault of their own, they are forced to scramble to find new accommodations and cover the costs of a sudden move,” Housing Minister Peter Milczyn said in a statement.
Landlords will have to pay one month’s rent to the evicted tenant or offer him or her another comparable rental unit.
There will also be a new measure in place to ensure that an apartment isn’t vacated, ostensibly for a relative, and, less than one year later, rented out to someone else.
“If the landlord advertises, re-rents or demolishes/converts the unit within one year, she or he will be considered to have acted in bad faith, unless they can prove otherwise and could face a fine of up to $25,000,” the government says.
“The new measures will help protect tenants by discouraging landlords from unlawfully evicting them, whether for conversion of the unit into a short-term rental or immediately re-renting it at a higher rate.”
Conclusion and some additional thoughts …
- Small landlords have a tendency to NOT raise rents to reduce incentives for tenants to leave. You should raise rents. If you do NOT raise rents you are diminishing the market value of your property.
- Understand that tenants will (understandably) covet places that have rents that are substantially below market rentals. The reality is that “rent control” has created a group of tenants who are effectively living rent free in Toronto. What I mean is that their rents are so low that they barely cover the property taxes and utilities – they pay nothing for the use of the building itself.
- One advantage to renting properties to students is that you have an annual turnover of tenants saving you from the problems in “1” and “2” above. Renting to students requires a certain skill, but there are great benefits!