Practically , how rent control act in Ontario affect Landlords

13 Replies

I know ON and QC now are the most less friendly Provinces for landlords, can some landlords share their exprience? is it something to worry about ? and what is your exit strategy if after all the screening you got trapped with a bad tetant ?

Being a landlord in Ontario can be a headache sometimes, but you just have to deal with it as it comes. Some properties you will visit once a year and never even hear from the tenants, others you will lose sleep over. The way I see it is, you're making money and making money never comes without some headaches.

Are you looking into a single family home or multi-family and what areas?

As for bad tenants, if they pay the rent you just deal with it and see if there's a way to get them out.

If they don't pay rent, you go through with the eviction process and just deal with all the hurdles of the LTB.

If you can hold the property for 6-12 months without any rent and have a bit of cash set away for incidentals, legal, intentional damage etc... it will never be too big of a deal. It just becomes a part of being a landlord in Ontario.

We have a good paralegal that we use if we end up with a tenant that we cannot easily get out ourself using the Landlord and Tenant Board N4 and L1 Forms and a hearing.  As @Jay Gill said, it is just part of being a landlord in this province.  The Key is to really screen the tenants.  Get to know them first, and google them and confirm their work and references.

Originally posted by @Jay Gill :

Are you looking into a single family home or multi-family and what areas?

Looking to invest in multi family , in small Ontario cities such as Hamilton , Kingston but it will be hard to get good tenants to live in such buildings , SFH look less headache but it is expensive that is it hard to produce positive cache flow with 20% down payment.

@Sam Hanaa To your original question, rent control affects landlords because some tenants stay for a long time and while rent rises with property value, the rent control stifles that. It creates units that are under-market. You will see many buildings on MLS advertised as "below market rent, could fetch $xxxx", but don't fall for that trap. It is below market rent because the tenants knows damn well they can't move out somewhere else and pay the same so they're going to stay. You won't get $xxxx because of rent control. So, you have to run your math based on the current rent.

It is not hard to find good tenants for multifamily buildings. Advertise well (don't be cheap, pay for top ad on Kijiji at least), do a comprehensive screening process, include a credit check (not a free one, pay for it) and ensure you're only renting to people who look really good on paper. Also, don't be a sleezy slumlord - have nice places to live and good tenants will show up. Price it a little high and have great service.

Exit strategy with a bad tenants is a dynamic conversation - what makes them bad? Non-paying? Be professional and sharp and get them evicted. Damaging things? Be sharp and professional and get them evicted. Annoying? Be sharp and professional and set expectations for what you will and will not do for them. <--- all of this is very academic coming from me because I've not had a bad tenants, I've just studied a lot about landlords in Ontario who have and made sure I didn't do what they did (non-professional, emotional, giving leeway and chances, not doing proper tenant screening, not setting expectations).

It is not hard to find good tenants for multifamily buildings. Advertise well (don't be cheap, pay for top ad on Kijiji at least), do a comprehensive screening process, include a credit check (not a free one, pay for it) and ensure you're only renting to people who look really good on paper. Also, don't be a sleezy slumlord - have nice places to live and good tenants will show up. Price it a little high and have great service.

@Matt Geerts I don't know how to quote forum posts, but this is advice to live by as a landlord, and it's actually really simple. We've always operated this way, and have never had a tenant that we've placed move out on us in 8 years of being landlords. The only bad tenant we've ever had was inherited, and we were lucky to get her to move along within a couple months. However, we still maintained high standards and treated her with fairness and respect throughout the process as well.  

I am not familiar with Quebec market, but the more experience I gain as a landlord in Ontario, and the more I learn, I feel like I see opportunity everywhere. My only problem right now is that I feel like I don't have enough time and money to take on more than one project at a time. 

@Jami Kloet

You are in the land of opportunity in Sarnia. I think the latest episode of Bigger Pockets podcast talks about raising capital. Also, come out to our meet-up in London to chat about how to use private money to grow faster. These Toronto investors think cashflow is like a unicorn, so show them some cash-flowing partnership deals that you can run in Sarnia and they'll be dumb not to buy in.

 @Matt Geerts

But according to Ontario law, is you buy a home and move in to live in then you have the right to evict the tenant, so why they still sell it under the market? unless all buyers are rental investment. 

I've been discouraged at first by friends for the reason you evoque. But in the end i studied the act and read as many books blog and forum thaf i could. Bought my first house and did a good screening. Everything went fine. Afterwards i bough more and more. houses. I did have bad tenants but you just have to serve them as soon as you can. Ie no payment on the 1st then serve N4 or L9 on the 2nd. Raise your rent every year to the guideline, otherwise you'll be mising on money. Start with a SFH to get started, if you don't like it then it's easy to sell amd move on. Bottom line is know your stuff and be professional and you'll be fine.
Originally posted by @Sam Hanaa :
 @Matt Geerts

But according to Ontario law, is you buy a home and move in to live in then you have the right to evict the tenant, so why they still sell it under the market? unless all buyers are rental investment. 

Two things. First, your comment about purchasing SFRs instead of multifamily but having to do 20% down on SFR... Last I checked multifamilies required 20-25% down as well, so that's a win for a MF.

As far as the quoted question, because the affidavit you'll sign and submit to the Landlord&Tenant Board and to the tenant says that you're buying the house, and want to evict the tenant for your own use. You must then occupy the property for a minimum of 12 months.

If you go ahead and rent it out a month later and the previous tenant sees the listing or realizes it's been rented again, you have to pay their rent difference for the year, moving costs, and possibly a fine to the LTB.