Becoming a Landlord in Ontario, Canada

So often we talk about people buying properties and obtaining mortgages so that they can move into their dream home. But what about those mortgages we take on (or want to take on) for those houses we don’t want to live in? Ah yes, it’s the envied rental property! With interest rates so low, and the stock market being somewhat shaky at the moment, investment property does seem to be the smart place to put your money. But hold up. Before you start signing new mortgage papers and interviewing tenants, you need to know a few things.
Before you do anything, including going to scout out new rental properties, know the laws. This is an area that you need to become extremely well-versed in and familiar with before you even start thinking about buying rental properties. You as a landlord, have certain rights and responsibilities; but your tenants will also have rights, such as regular maintenance and proper notice for visits, in exchange for their responsibilities such as paying rent. Make sure you know all the laws pertaining to you as the landlord, and to them as the tenant. A couple of good places to get started is to familiarize yourself with the Residential Tenancies Act and the Ontario Tenants Rights website.
Once you know your rights, you then need to choose your rental property very carefully. Many landlords-to-be are so eager to start collecting rent, that they give little thought to the actual property. After all, they’re not living in it and if it’s got four walls and a bathroom, it must be suitable for someone, right? No. Choose a property that has passed inspection, just as you would get for your own home, and that is in suitable living conditions. A home that needs some minor repair is fine, but you also might not want to take out a home equity loan on your own residence to make major improvements to the rental property.
After you’ve gained an understanding of the laws involved and you’ve found a suitable rental property, it’s then time to find some tenants to fill it – and this is going to be one of the most important steps of all. Make sure that you screen tenants, many tenants, very carefully. Many landlords are so eager to start getting those rent cheques that they accept the first people to apply for the place. But this can cost you severely in the long run should you end up with nightmare tenants that are continuously late with rent or the destroy the carpets or put big holes in the walls.
This is a very brief summary of the things you need to consider if you want to become a landlord in Ontario. All too often, landlords find too late after the fact that in the landlord-tenant relationship, it’s the tenant who has most of the rights. And while real estate is always your best investment, you want to protect it just as much as you would anything else.