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The case for investing in residential #Torontorealestate investment properties

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The above tweet references a very interesting article. What is clear is that there continues to be a shortage of quality rental housing in Toronto. As a result, the demand for Toronto rentals has been high – including the demand for rental condominiums. In fact, it has been reported that “bidding wars erupted for the best condominium rentals“. The rapid building of condominium units (many of which are investor owned and become rental units) has masked this problem. The article also notes (quite correctly) that tenants have no “security of tenure” in privately owned condominium units. (This is because the landlord can either move in himself or sell the property. It is true even with the difficulties associated with selling a property with tenants in it.) Furthermore, although this is not widely discussed, rental condominiums put into service after 1991 are NOT subject to Ontario rental controls. That said, in a competitive rental market, landlords must be thoughtful about how to raise residential rents.

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Ontario legislature likely to extend rent contol to rental units put into service after 1991

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The above article from the Toronto Star is an example of:

1. Bad property management because it doesn’t respect the principle that tenant turnover is over costly to the landlord; and

2. The principle that the highest rent is not always the best rent;

3. An bad example of how to raise residential rents in Ontario

Furthermore, the landlord is publicly flaunting the fact that in Ontario, residential rental units put into service after November 1991 are not subject to rent control

The following excerpt from the article by Susan Pigg of the Toronto Star says it all:

The property management company for the Standard Lofts said via email that “we are operating according to the law” and stressed that “rents are raised to what the market will bear and decreased if rents are over market so as not to lose tenants.”

But Toronto city councillor Anthony Perruzza is so concerned about similar complaints from tenants in his renter-heavy North York ward, that this week he introduced a motion before executive committee urging the province to make all rental units — including investor-owned condos — subject to rent controls “to level the playing field” in the city’s tight rental market.

NDP MPP Jonah Schein has started an online petition and his party plans to introduce a bill next week aimed at ending what tenant advocates call “a two-tiered system of renters in Ontario” — those in older buildings where rent increases are limited to about 2.5 per cent this year, and those in apartments or rental condos occupied after November 1, 1991 where increases aren’t capped.

My predication: The law will be changed and this property management company will be used as an example of why it must be changed. Hey, I’m a landlord. But, I also recognize that successful property management requires that your tenants be happy.

Also, to be brutally honest here, is there really a reason why there should be two sets of laws for Ontario rental property? One set of laws for rentals units put into service prior to November 1991 and one set for those after?

 

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How to raise residential rents in Ontario

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Part of managing residential properties is to manage rent increases. Rent increases are governed by the Residential Tenancies Act of Ontario.

 

The 4 considerations include:

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How a landlord can evict a tenant in Ontario

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The above tweet links  to the Ontario Landlord  Tenant Board. It  is an excellent summary of the law. Evicting a tenant in Ontario is difficult and requires judgment, common sense and patience. If you follow the principles for how to select tenants you will rarely need to evict  one.

 

 

 

When it comes to setting rents: Your “best rent” is not your “highest rent”

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apartmentforrentJust had this conversation with a client. Yes, it’s true. Your best  rent is not usually your highest rent! I recall a scene from one  of my favorite  novels. The man was deciding what to offer a contractor. He said:My offer will be  his “best offer”.  It may not be his “highest offer”, but it will be his “best  offer”.

What does this mean when it comes  to renting residential properties?

You do  NOT want to ask for the highest possible dollar amount for rents.

 

 

The reasons are:

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The difficult tenant we deal with today, the impossible tenant takes a bit longer

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difficult

The difficult we do today. The impossible takes a bit longer.

I believe the above quotation comes from the military.

During the last couple weeks we have been receiving a number of calls from landlords who are faced with problem tenants. The reasons vary from non-payment of rent to tenants who cause damage. Most of the callers wanted to explore their legal options for how to to evict the tenant. In each case, after having explored the facts we have given the following advice:

Begin by trying to get the tenant to leave without using your legal remedies!

If you are selling a property that has tenants in it, you should take special care to work collaboratively with the tenant.

The Ontario laws governing landlords and tenants (and many other jurisdictions) are very sympathetic to tenants. If you really want the tenant to vacate the premises you do NOT want to run the risk of “losing” at a Landlord Tenant hearing.

Therefore, I suggest:

1. You keep channels of communication open with the tenant.

2. You try to work with the tenant to identify the conditions under which the tenant would be willing to leave.

3. You must be prepared to forgo some back rent or other amounts that are owed to you.

Be patient! Be calm! Be courteous!  Be collaborative in your approach!

At the end of the day, the tenant will vacate the premises. It’s just a question of being smart about how to achieve this.

 

 

Demand for Toronto rental condos strong – Star Reports

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Are condos a good investment? Although there are differing views on this, the Toronto Star is reporting that the demand for renting those investment condos is strong. Of course, the quality of an investment is relative. Will they appreciate over time as much as investing in a detached home? I don’t see how they could. But, ….

Have a look at the following two recent articles.

 

Short term property management Toronto

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New service!! – Short term property management in the GTA

If you are a small landlord who spends part of the year away:

– we will manage your rental property while you are away. We  will  ensure that your time away is “care free”

If  you are a homeowner who is away for more  than a few days and wants someone to look after your property then we can help you with that as well. The goal  is to “cut the  worry”.

Please contact us  specifying:

– when you are away

– the location and type of propety

– exactly what you want done

and you will receive  our quick reply.

Don’t like forms?

647 728 4500

landlordgta at gmail dot com

 

 

 

Great news for small landlords – Canadian governmen takes steps to cool real estate market

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This is very good news. There are two reasons.

First, by making it somewhat harder for first time buyers, the demand for rentals will increase.

Second, it will provide some protection (although it can never be enough) against the inevitable correction.

Here is a Globe and Mail editorial on this topic: Continue reading →