Looking to rent out your Toronto apartment or condo? We’ve put together a complete guide of everything you need to know.
Finding a great tenant involves pricing and advertising the property, showing it to prospective tenants, 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 for your second suite apartment or condo: 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 Craigslist. As with most things in life, if it seems too good to be true, it probably is. Viewit.ca is another great 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 REALTOR to help you find a tenant. Many real estate agents offer leasing services that include pricing, advertising, showing, screening, negotiating and paperwork (the total cost is usually one month’s rent, half of which is typically offered to the agent who brings a buyer). If you don’t have the time (or skills) to find a great tenant, consider hiring a professional.
Pro Tip: The BREL team helps many Toronto landlords find great tenants (and for an additional cost, we offer ongoing property management too). In 2015, we leased out our clients’ properties on average, in 21 days.
The City of Toronto has some by-laws and rules that affect 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;
- property standards;
- occupancy standards;
- health and safety requirements; and
- fire and electrical codes
Click here for full details on what qualifies as a legal apartment in Toronto.
If you own a condo in Toronto, the Condominium Corporation will likely have rules that dictate rentals in the building (minimum lease terms, the obligation to provide a copy of the lease to the property manager, etc.). If you’re thinking of renting out your condo, make sure to get a full understanding of your restrictions and obligations.
When to Advertise Your Property
Most Toronto rentals come on the market two months before they are 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?
Average prices for rental apartments and condos in Toronto in 2015:
- Bachelor apartment: $1,350 ($1,387 in central Toronto)
- 1 bedroom apartment $1,653 (average $1,723 in central Toronto)
- 2 bedroom apartment – $2,236 (average ($2,466 in central Toronto)
The best way to price your property is by finding out what other nearby apartments have rented for (“comparables”). Real estate agents have access to a ton of rental history so if you hire an agent, you’ll be able to price your apartment or condo more easily.
The Toronto Rental Market
The Toronto rental market is HOT! We are experiencing vacancy rates at all time lows (around 1.5%) meaning that Landlords have their pick of who they want to rent to (and for how much). Rents have increased significantly over the last five years and aren’t expected to decrease any time soon.
The lease is the document that summarizes your relationship with the tenant – how much rent they’ll pay, the dates of the lease, rules around pets and smoking, what happens at the end of the lease, etc.
Leases are typically for 12 months and after that (unless a new lease is signed), tenants are automatically considered to be ‘month-to-month’, meaning that they don’t generally need to commit for another 12 months. Month-to-month tenants are required to give 60 days notice before moving out (counting from the first of the coming month; i.e. if they give notice June 24th, then they can move out on August 31st).
Your Rights and Obligations as a Landlord
Ontario tenants have many rights. Among the important ones:
- Pets – Landlords can’t evict a tenant for having a pet, but they can refuse to rent to someone with a pet in the first place. If you own a condo, the Condominium rules take precedence over the Residential Tenancies Act, so if the condo doesn’t allow pets, you may be able to evict Fido or Fifi.
- Rent Increases – In Ontario, rent increases are controlled, but the rules don’t apply to buildings built in the last 20 years (in other words, most condos). Generally speaking, landlords can increase the rent once every 12 months by up to a maximum equal to the Consumer Price Index (CPI) for that year(e.g. it was 1.6% in 2015). If the building was built after November 1, 1991, however, Landlords can increase rent by as much as they want provided they give 90 days notice (and use a special form).
- 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). You also have the right to show the unit to prospective tenants and/or buyers with appropriate 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 notice in writing (counting from the 1st 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).
- What Happens if You Want to Sell – If you have a valid written lease, you may NOT evict the tenant in order to sell the property. The lease simply transfers to the new owner (at the current rent and terms). If you have a ‘month-to-month’ tenant, you may give the usual 60 days written notice to the tenant, on behalf of the new buyer (assuming the new buyer is moving in themselves).
You have MANY obligations as a Landlord – click here to find out more.
Also, note that all new tenants by law must be given a copy of the Landlord and Tenant Board’s Info for New Tenants Brochure with a summary of landlord and tenant rights & 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
On the application, make sure to request:
- Previous addresses and landlord names/contact information
- Employment details for the last several years
- Details of any other people who will reside in the apartment
- Details about any pets
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’re looking to rent out your second suite apartment or condo in Toronto and want to leave the details to a professional, text, call or send us an email.