Hi,
I bought a condo to rent out in Mississauga. Few questions
1. Should I try to rent it out myself or get a realtor?
If I do it myself
1. what documents would I need to provide the tenant?
2. What type of documents should I request from the tenants to be able to screen them. Anyone willing to share what documents they use
3. How do I go about screening them. Any best practice that anyone can share. Any red flags I should I be aware of.
4. If something needs repairs b3 abuse the tenant misused it. Who is responsible to pay.
5. can I put in a factor of inflation in the rental contract
thanks.
Hey Mark,
Congrats! Real estate is one of the best and time tested paths to financial freedom.
The choice is yours on whether to use a realtor or rent it out yourself. Doing it yourself is a great way to learn and expand your investor knowledge, it just requires a little more time and effort. Conversely, an experienced realtor will help save time by helping you establish price based on recent comparable lease data, which can be challenging if your development is the first to come on line in a given area or if the market is going through a shift. I did it myself with my first investment property.
You have to provide the would be tenant with an Ontario Standard Lease, which is now a mandatory requirement.
Documents to request from Tenant: Job Letter with annual/hourly salary, start date, job title, and a contact to call at the company, 3 Pay Stubs (some people are paid weekly), Credit Report, Landlord References and Personal References. If the tenant is self-employed: NOAs for the two previous years, Bank Statements showing activity going back 90 days, Credit Report, Landlord References and Personal References.
Repairs due to Tenant misuse: Include a clause for Neglect. For example, "Tenant agrees to pay for the entire cost of repair of damage caused by the Tenant's willful damage or negligence."
Rental Increase: The Ontario Government has set the guidelines for rental increase. Based on the Ontario Consumer Price Index (CPI), the guideline on rent increases for 2022 in Ontario is 1.2 per cent. The CPI is a measure of inflation calculated monthly by Statistics Canada using data that reflects economic conditions over the past year.
The guideline applies to most residential rental accommodations covered by the . It does not apply to rental units in buildings occupied for the first time after November 15, 2018, social housing units, long-term care homes or commercial property.
There are some links below you may find helpful. If you need a list of clauses, let me know.
Ontario Standard Lease https://www.ontario.ca/page/gu...
Price Data https://housesigma.com/
Ontario's 2022 Rent Increase Guideline https://news.ontario.ca/en/bul...
Tribunals Ontario https://tribunalsontario.ca/lt...
Ontario is very tenant friendly. You should be able to find a standard lease for ON online. You might want to talk to a property manager. Once you set the price for rent, that is what it is until the lease expires (usually 1 year). If it is a condo, give them a copy of the condo rules and make them sign in the lease that they have received and read the condo rules and will follow them.
Ontario is very tenant friendly. You should be able to find a standard lease for ON online. You might want to talk to a property manager. Once you set the price for rent, that is what it is until the lease expires (usually 1 year). If it is a condo, give them a copy of the condo rules and make them sign in the lease that they have received and read the condo rules and will follow them.
Ontario is very tenant friendly. You should be able to find a standard lease for ON online. You might want to talk to a property manager. Once you set the price for rent, that is what it is until the lease expires (usually 1 year). If it is a condo, give them a copy of the condo rules and make them sign in the lease that they have received and read the condo rules and will follow them.
Ask for references. You could ask to see some photo id when they sign the lease. When talking to the references, make sure they are not relatives. Ask how long they've been at the current rental, why they are moving, etc.
Hey Mark!
Whether you use a realtor or find a tenant yourself is up to you. You should be able to advertise the unit and screen tenants yourself pretty easily unless you just don’t want to do that at all. To answer the rest of your questions:
1. You would need the Ontario Residential Tenancy Agreement for you and your tenant to sign where all the clauses and rules are basically outlined there for you. You can add your own clauses as well. That’s your lease agreement.
2. The standard is 2 recent pay stubs, employment letter and credit report.
3. That is, again, up to you. I would make sure they make a good enough income for the rent you are commanding, that their job seems more secure and they have a good credit score.
4. If you get a good tenant they should pay if they break something. This can’t really be enforced though, Ontario is very tenant friendly.
5. Like stated above, your leases are typically for a year and you can only raise rents once a year. There is a limit to how much you can raise them too and it fluctuates. I don’t remember off the top of my head but I think last I checked it was like 2% per year.
Hope that helps!
Hey Mark!
Whether you use a realtor or find a tenant yourself is up to you. You should be able to advertise the unit and screen tenants yourself pretty easily unless you just don’t want to do that at all. To answer the rest of your questions:
1. You would need the Ontario Residential Tenancy Agreement for you and your tenant to sign where all the clauses and rules are basically outlined there for you. You can add your own clauses as well. That’s your lease agreement.
2. The standard is 2 recent pay stubs, employment letter and credit report.
3. That is, again, up to you. I would make sure they make a good enough income for the rent you are commanding, that their job seems more secure and they have a good credit score.
4. If you get a good tenant they should pay if they break something. This can’t really be enforced though, Ontario is very tenant friendly.
5. Like stated above, your leases are typically for a year and you can only raise rents once a year. There is a limit to how much you can raise them too and it fluctuates. I don’t remember off the top of my head but I think last I checked it was like 2% per year.
Hope that helps!
Ontario is very tenant friendly. You should be able to find a standard lease for ON online. You might want to talk to a property manager. Once you set the price for rent, that is what it is until the lease expires (usually 1 year). If it is a condo, give them a copy of the condo rules and make them sign in the lease that they have received and read the condo rules and will follow them.
Ask for references. You could ask to see some photo id when they sign the lease. When talking to the references, make sure they are not relatives. Ask how long they've been at the current rental, why they are moving, etc.
@Mark L. Since this is the 1st time you are renting it out, I would suggest you use an agent for the 1st time to see their process and the forms they use. This will cost you about 1 months worth of rent but will be worth the education. You can also see how they advertise the unit. It's not hard to do.
In the lease you can add in a clause about noise, smoking (including cannabis).
Hi Mark - It all depends on your level of comfort in dealing with the process and what you need to get done.
1. If you are comfortable with the renting process and you know what clauses to add to cover yourself - then you're good. It's a little more complicated than just signing an agreement though.
2. The advice that Nick Vazquez has given is right on point. The only things I would add are to make sure you actually follow through on the references and verify employment details. Making the calls up front will save you headaches later on. Also, make sure the Tenant's Credit report is satisfactory to your liking.
3. When everything goes as you expected, you're happy and so is your tenant. It's when things "don't go as planned" that you need to be aware of what needs to be done. I can give you some horror stories on that if you have time :-)!!
4. It really helps to have some pre-defined clauses that lay the groundwork to make sure your Tenant abides by the agreement. DM me and I can send you what I use. However keep in mind, you can have as many clauses in your agreement as you want, but if you don't get a good tenant to start with, be ready to follow the lawful process to move the tenant out and have a hefty dose of patience to go with it - Ontario is Tenant friendly so it can take time to resolve disputes.
Hope that helps further.
Hey Mark,
Congrats! Real estate is one of the best and time tested paths to financial freedom.
The choice is yours on whether to use a realtor or rent it out yourself. Doing it yourself is a great way to learn and expand your investor knowledge, it just requires a little more time and effort. Conversely, an experienced realtor will help save time by helping you establish price based on recent comparable lease data, which can be challenging if your development is the first to come on line in a given area or if the market is going through a shift. I did it myself with my first investment property.
You have to provide the would be tenant with an Ontario Standard Lease, which is now a mandatory requirement.
Documents to request from Tenant: Job Letter with annual/hourly salary, start date, job title, and a contact to call at the company, 3 Pay Stubs (some people are paid weekly), Credit Report, Landlord References and Personal References. If the tenant is self-employed: NOAs for the two previous years, Bank Statements showing activity going back 90 days, Credit Report, Landlord References and Personal References.
Repairs due to Tenant misuse: Include a clause for Neglect. For example, "Tenant agrees to pay for the entire cost of repair of damage caused by the Tenant's willful damage or negligence."
Rental Increase: The Ontario Government has set the guidelines for rental increase. Based on the Ontario Consumer Price Index (CPI), the guideline on rent increases for 2022 in Ontario is 1.2 per cent. The CPI is a measure of inflation calculated monthly by Statistics Canada using data that reflects economic conditions over the past year.
The guideline applies to most residential rental accommodations covered by the . It does not apply to rental units in buildings occupied for the first time after November 15, 2018, social housing units, long-term care homes or commercial property.
There are some links below you may find helpful. If you need a list of clauses, let me know.
Ontario Standard Lease https://www.ontario.ca/page/gu...
Price Data https://housesigma.com/
Ontario's 2022 Rent Increase Guideline https://news.ontario.ca/en/bul...
Tribunals Ontario https://tribunalsontario.ca/lt...
Great info above; a few things I like to do below:
I like to give a basic instructional tasks to 'weed the garden', especially when there is a lot of demand. On the ad, I put a sentence at the bottom saying if you are interested in this property please email me back with a few sentences about yourself and what you do for a living.
When there are a lot of responses, I will respond only to those who have taken the time to read the whole ad and respond in the manner requested. Usually, if you are not willing to read the full ad, you are not a serious prospective tenant.
Secondly, I will respond and set up a call for the following day at a time that works for them. This is another small test, if they cannot keep their schedule straight for our call the next day, they probably are not serious or can't pay rent on time. On this call, I just ask a few basic questions and let them speak and listen for anything that sounds off.
Hi,
I bought a condo to rent out in Mississauga. Few questions
1. Should I try to rent it out myself or get a realtor?
If I do it myself
1. what documents would I need to provide the tenant?
2. What type of documents should I request from the tenants to be able to screen them. Anyone willing to share what documents they use
3. How do I go about screening them. Any best practice that anyone can share. Any red flags I should I be aware of.
4. If something needs repairs b3 abuse the tenant misused it. Who is responsible to pay.
5. can I put in a factor of inflation in the rental contract
thanks.
1. I would strongly recommend a property manager rather than yourself or a Realtor to do the leasing. You want a great company that will get you a great tenant so that you will have a great experience as a Landlord. This is critical to your success in this business.
2. Your Realtor will have an application form that you can use. And also, get pay stubs and employment letters and a credit bureau full print out.
3. Review the Credit Report and score. It tells a story of their history. Call the past landlord rather than the one that they are living at now. That past landlord will be willing to tell the truth about them whereas the current landlord might say anything to get them out. Call their company using the General Phone number for the company from the internet rather than the one they supply. This way for sure you are calling the company rather than a buddy's cell phone. Search all social media for the applicant and review all you can about them. Look at the stability of their job history. Look at the number of people that want to have in the house and the age of the applicant as well as the income to be sure they make enough money to pay the rent and still have money left over for other bills, etc.
4. Tenants must keep the home in good repair and if they damage the house they will be responsible yet it is often not easy to collect from them. That is more of the issue and the reason that you want excellent tenants that generally will not cause damage.
5. You cannot put in a factor for inflation in the rental contract. The government limits the amount that you can increase the rent each year. It is readily available on the internet.
Best Wishes! Connect with em anytime.
Credit Report score should be at least 650-675 minimum.
Great questions and answers from locals that understand the market and have a keen level of experience. I do recommend that you learn the ropes yourself. I think interacting with tenants is a very useful experiential learning opportunity. Lean on your network for help with reviewing any tenants that you feel are worthy of renting your place to, for security.
I use credit quality and affordability metrics to ensure that prospects can afford the rent. You should begin to establish a process for evaluating your rental market, your advertising, process for interviewing tenants including a formal series of questions. In addition, you should understand how to extract critical information from prospects that will allow you to make good decisions on leasing.
Standard Ontario Lease is required, but you should start to think about all the terms and conditions that are not included in the standard lease and prepare to include them in your agreement. I have several specific terms that i include, which are highlighted and require initialling so that I have some form of proof that they were aware of those conditions. You will build up a very good list of terms to add as an operator of rental properties.
Red Flags - tenants that can answer everyone of your questions. Pro's know exactly what you want to hear. If it is too good to be true, then usually it is. "I make $10k per month but have a 480 credit score but I pay my bills on time."
Repairs and maintenance or very tricky to enforce. Discuss with tenants what represents normal wear and tear and what does not. I always maintain a fund to fix damages, both accidental or negligence. The downtime, legal costs and that "kicked in the privates" feeling from trying to extract damage money from a tenant is not worth it. Inspect your properties often. Use fire safety inspection as way to get in every three months. This way you can have hard conversations with them sooner rather than later.
Good luck with land lording. It is the only way to economic self sufficiency that I know.