Finding a great tenant involves patience, proper pricing and advertising, showcasing the property, interviewing tenants, checking references, negotiating and putting together a lease.
How and Where to Look for Tenants
There are two ways to look for tenants: on your own, or with the help of a real estate agent.
- On Your Own: Many landlords have successfully found tenants on Craigslist and Kijiji, though be prepared for a random selection of prospective tenants. If an ‘overseas tenant’ offers to take your apartment without seeing it, be cautious – there are many sophisticated scams operating on the internet. As with most things in life, if it seems too good to be true, it probably is. Viewit.ca is another advertising site for landlords. For $55 a month, your property will be showcased online to prospective tenants.
- Hire a REALTOR: Of course, you can always work with a licensed real estate agent to help you find a tenant. Many real estate agents offer leasing services that include pricing, advertising, showing, screening, negotiating and completing the paperwork (the total cost is usually one month’s rent, half of which is typically offered to the agent who brings a tenant). If you do not have the time to find a great tenant, consider hiring a professional.
When to Advertise Your Property
Most Toronto rentals come on the market two months before they are to become available for rent (e.g. an apartment will go on the market April 1st for a June 1st occupancy).
How Much is Rent in Toronto?
According to the Toronto Real Estate Board, the official average monthly prices for rental apartments and condos in 2018 is:
- Bachelor apartment: $1,657
- 1-bedroom apartment: $1,995
- 2-bedroom apartment: $2,653
- 3-bedroom apartment: $3,344
The Toronto Rental Market
The Toronto rental market is HOT! We are experiencing vacancy rates at all time lows (around 1%). Rents have increased steadily over the last five years as has demand.
The lease is the document that governs your relationship with the tenant – rent amount, use of the property, term of the lease, what happens at the end of the lease, etc.
Leases are typically for a 12 month term after which (unless a new lease is signed), tenants are automatically considered to be ‘month-to-month’, meaning that they do not need to commit for another 12 month term. Month-to-month tenants are required to give 60 days' notice before moving out (beginning on the first day of the following month; i.e. if they give notice June 24th, they can move out on August 31st).
Your Rights and Obligations as a Landlord
Ontario tenants have many rights, including:
- Pets – Landlords can not evict a tenant for having a pet. If you own a condo, the Condominium rules take precedence over the Residential Tenancies Act, so if the condo does not allow pets, you will not be able to rent to pet owners.
- Rent Increases – In Ontario, rent increases are controlled by the government. Generally speaking, landlords can increase the rent once every 12 months by up to a maximum set out by regulation every year. In 2018, the maximum allowable rent increase was 1.8%.
- Right to Access Property – Generally, Landlords have the right to enter an apartment to repair and maintain it (with 24 hours' notice) or in the case of an emergency. Landlords also have the right to show their unit to prospective tenants and/or buyers with 24 hours' written notice.
- What Happens if You Want to Move Back in – You may NOT move back into your condo or apartment during the term of the lease. If the tenant is on a month-to-month lease, you may provide 60 days' written notice (counting from the 1st day of the coming month) in order to occupy the unit (note: you or a family member must be the person occupying the unit, – you cannot simply give notice to the tenant in order to allow someone else to move in). An owner wishing to occupy their unit must:
- Compensate the Tenant with one month’s rent or offer them another acceptable unit
- Occupy the unit for at least one year
- If the Landlord advertises the unit for rent or sale, re-rents, demolishes or converts the unit within 12 months of the Tenant vacating, the Landlord may be subject to a fine of up to $25,000
- What Happens if You Want to Sell – If you have a valid lease, you may NOT evict the tenant in order to sell the property. The lease simply transfers to the new owner (at the current terms). If you have a ‘month-to-month’ tenant and the new buyer is moving in, you may give the usual 60 days' written notice to the tenant on behalf of the new buyer. When a tenanted unit is sold to a new buyer and the existing owner gives notice to the tenant on the new owner’s behalf, compensation to the tenant is not required.
The City of Toronto has by-laws that regulate the rental of second suites, defined as self-contained rental units in a detached or semi-detached house. To be considered a ‘legal apartment’, the apartment will need to meet certain standards:
- residential zoning requirements;
- property standards;
- occupancy standards;
- health and safety requirements; and
- fire and electrical codes
You have MANY obligations as a Landlord – click here to find out more.
Also, note that all new tenants must, by law, be given a copy of the Landlord and Tenant Board’s Info for New Tenants Brochure with a summary of landlord and tenant rights and responsibilities.
Finding the Tenant You Want
One of the most important parts of finding a good tenant is screening. Make sure to request:
- First and last month’s rent (ideally as a certified cheque or bank draft)
- A current credit check
- Confirmation of employment letter
- Previous addresses and landlord names/contact information
- Employment details for the last several years
- Details of any other people who will reside in the unit
Ready to Become a Toronto Landlord?
Becoming a landlord can be an excellent source of revenue but it can seem like a second job, so make sure to do your homework before you commit.
If you are looking to rent your apartment or condo in Toronto and want to leave the details to a professional, text, call or send us an email.