Toronto Real Estate Income Properties

Ever consider renting out your Toronto real estate? Maybe you have a spare bedroom, basement or whole home that was bought as an investment property and some extra income would certainly help with paying off the mortgage.

There are more laws in place in Ontario to protect tenants than landlords. In the case of a renter having problems with large property management corporations that may be a good thing, but in the case of a homeowner with an unruly tenant, it can lead to huge headaches. You might think you’ll have more control as an independent landlord and that you’ll have ample opportunity to effectively “screen” the people who may eventually be renting your home. However, this is not usually the case.

For example, you may be surprised to learn you can’t prevent someone with a bunch of teenagers from renting your space. You also can’t kick someone out once you find out that despite your “no pets” rule, they’re living with a big, smelly dog.

It can take several months to evict someone, even if they are causing damage or disturbing the neighbours. Further, there’s the problem of difficult tenants who actually know their rights and know the law, who can work the system and make eviction take even longer. If you find your basement apartment is illegal because of a lack or permits or improper construction, you still can’t kick them out. Need the apartment for yourself and have proof? The tenant can claim they cannot find another suitable apartment and stick around for as long as it takes them to find one.

A potential tenant cannot be asked about their marital status, sexual preference, religion or whether they have children, but they can be asked how many people will be living in the apartment. These are all of course great rules for preventing discrimination in our wonderful country but they can work against you. If, for example, you prefer not to have small children living in the space and the tenant who has children gets wind of this and realizes they’re not getting the apartment for that reason, you can be sued. The same would go for female homeowners actively looking for female tenants and preferring not to have male tenants for any reason.

The potential damage and legal costs can completely negate any profit made from renting property out unless the tenant is a great one. Luckily, most tenants will be well-behaved and respectful and there are a couple ways to ensure you’re matched up with those tenants.

Researching the tenant can save a lot of frustrations and money down the road, and this research comes in the form of credit and background checks. Do not hesitate to ask for references from prior landlords because they’ll be the first ones to tell you what the tenant was like and whether they paid rent on time. You can also ask the potential tenant for a pay stub from their current job to check on their income and employment status.