Tips For New Landlords

With a constantly growing demand for rental housing, purchasing an investment property in the Greater Toronto Area is a smart way to grow your personal wealth. That being said, becoming a landlord does require some education and preparation.  

As Vaughan’s top-performing real estate team, we’ve helped thousands of clients with all types of goals and backgrounds, including investors and landlords. Whether you’re considering an investment in a dedicated rental property, or have recently purchased one and aren’t sure where to start – we’ve got tips for you. 

Not sure which type of property will make the best investment for you? Click here to read our blog on houses vs condos as profitable rental properties. 

Invest Strategically 

One of the biggest factors to consider in your investment is location. The location of your rental property will influence what type of tenants you attract and how much you can earn. For instance, a property that’s located close to transit, post-secondary schools, good nightlife, high-quality amenities or other perks will be much more enticing to potential tenants than one that’s further removed.  

Become Familiar with the Standard Form of Lease

In Ontario, the provincial government requires landlords to use a standardized lease contract, also known as the Residential Tenancy Agreement (RTA). When a tenant wishes to rent out your property,  this is the lease that they will need to sign. 

At the end of the day, the RTA is there to protect you and your tenants. It outlines key rights, responsibilities, and restrictions related to property use, communication, and your landlord-tenant relationship. Before beginning your tenant search, take a moment to familiarize yourself with the RTA. If you have any questions about it you can ask your real estate agent for advice. 

Looking to buy a profitable rental property? You may find these blog posts helpful. 

• How to Create Wealth Investing in Canadian Real Estate
• The Biggest Misconceptions About Real Estate Investing
• How Our VIP Buyer’s Program Can Help You Make a Wise Investment

Choose Your Tenants Carefully

When the time comes to fill your vacant property you’ll want to be very selective in choosing a tenant. A great tenant can provide you with a secure and low-stress investment, while a not-so-ideal tenant can lead to headaches, late payments, and other challenges. Finding the perfect tenant begins with an in-depth screening process. When you start receiving applications on your listing, be sure to request employment verification, a credit check, and references from their past or current landlords. While this will take a little bit of effort, it’s well worth it in the long run. 

Be Aware of the Market

Just like finding the perfect tenant, setting your rental rates also requires some due diligence. While the demand for rental housing is pushing the market value upwards, setting your price too high could cause tenants to become stretched thin in the middle of their lease – causing you to start the tenant search process all over again. On the other hand, setting the price too low will mean missing out on valuable returns in the short and long term.

During this step, a little research can go a long way. Look at other rental listings in the immediate area and see what landlords are charging for their units. However, remember to be mindful of the differences between your property and theirs. For example, if you see a unit with similar square footage to yours, but this property is located in a modern condo building with high-end on-site amenities, you may not be able to charge an identical rate. Once again, your real estate agent can help you decide what the best rent to charge will be. 

As an extension of this, be considerate of when and how you increase your tenant’s rent. Like lease agreements, rent increases are subject to restrictions under the provincial government. Currently, landlords are only allowed to increase rent once every twelve months at a maximum increase of 2.5%. You must also provide a written notice of the increase 90 days prior to it taking effect. 

In Vaughan, pre-construction condos make a unique (and highly profitable) income property. Check out these blog posts to learn more. 

• An Investor’s Guide to Pre-Construction Condos
• What Happens if My Pre-Construction Condo is Delayed?
• Working With an Agent When Buying a New Development Condo

Keep Records of Everything 

Lastly, remember to keep detailed records of everything related to your investment property. This includes lease agreements from past and present tenants, expenses related to the property, and payment receipts. Keeping these items organized and filed will make it much easier during tax season or if you need to solve a dispute of any kind. 

Ready to find the perfect income property and start building your wealth? The Lino Arci Team can help you make a remarkable investment. Call our team at 416-571-2724 or email info@arciteam.com to get started.