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A Guide to Leasing, Managing, and Maintaining Your Rental Property
To be a successful landlord, you should make the effort to understand everything involved in leasing your property, managing the building, and working with tenants.
From following the provincial rules to tracking your monthly and annual cash flow, there are many details to prepare for. To get you started, we answer the most common questions that prospective landlords have about leasing out their rental units.
What You'll Learn...
Getting Started
What laws do I need to know and follow to be a landlord in Ontario?
Both landlords and tenants must follow the Residential Tenancies Act (RTA), which outlines how the two parties interact and helps ensure a fair relationship. It covers everything from what counts as a legal lease agreement to each party’s responsibilities and how to end a lease properly. Additionally, the Landlord and Tenant Board (LTB) enforces the rules and handles any disputes that come up.
Do I need a written lease? Should I use a specific rental agreement form?
Yes, you should always have a written lease that clearly outlines the rental agreement and avoids potential miscommunication, misunderstandings, and legal problems. In Ontario, private residential rentals must use the Residential Tenancy Agreement (Standard Form of Lease) as provided by the provincial government and give a copy to the tenant within 21 days of the start of the lease period.
Do other rules apply when I rent out a condo unit versus a house?
For condos, you must abide by the Condominium Act and your condo building’s by-laws as well as the RTA. These additional rules may restrict you from renting out your unit (long-term or short-term) or from even having pets in the building, which may deter some renters from moving in. Make sure you and your tenant know the building’s rules and follow them to avoid trouble.
Money Matters
How much rent should I charge?
Several factors affect the rental rate, and you’ll need to weigh them carefully before setting your price. If you don’t set the correct price, you risk alienating potential renters with an unreasonably high asking rate or selling yourself short and becoming cash flow negative. The best way to find the right rate is to work with an experienced real estate agent who can evaluate the market for you and tell you what to charge based on your rental’s unique features.
How much can I increase the rent each year?
Ontario has rent control for many rental properties, and the amount is announced every year. The provincial guideline is typically around 2%; you must get LTB approval for any above-guideline increases. However, rent control does not apply to rentals first occupied after November 15, 2018.
Can I ask for a security deposit from my tenant?
No, you cannot collect a security deposit from a renter in Ontario, only a rent deposit. The rent deposit can only be used to cover the final month of rent and cannot exceed one month’s rent.
What tax deductions can I claim on my rental property?
You can claim many items for your rental, including expenses for advertising, insurance, management, repairs, property taxes, maintenance fees, utilities and loan interest. You can find the full list of landlord tax deductions in our article here.
How do I calculate the return on investment on my rental property?
Before you become a landlord, it's worth calculating the potential returns on your real estate investment. You can factor in the double earnings from growing property value and steady rental income, comparing one property to another to find the one that best matches your financial goals. A real estate expert can help you process the numbers and assess the market so you can make an informed investment decision. GTA-Homes also offers multiple calculator tools to help you plan ahead.
Tenant Relations
How do I screen for good tenants?
Tenant screening is an important step to securing a reliable person for your rental unit. Set clear expectations early and run the necessary checks to find a renter with stable income. Get comprehensive information from the tenant, verify their claims by calling employers or previous landlords, and avoid people with multiple red flags.
What red flags do I need to watch out for?
Flag potential problems in prospective renters to avoid bigger issues later. This includes rudeness, dishonesty, suspicious behaviour, recent criminality, or a history of changing homes or jobs often. Find a full list of red flags in our dedicated article here.
How do I keep a good tenant for as long as possible?
Once you have found a good tenant who pays rent on time and takes care of the property, you will want to keep them for as long as you can. You can encourage them to stay by building up a good relationship, communicating with them, handling repairs quickly, and offering incentives.
What happens when I need to evict a tenant?
Sometimes, you may need to evict a tenant for “no-fault” or “for cause” reasons. Typically, you must first provide proper advance written notice to end the tenancy, which you send to both the tenant and the Landlord and Tenant Board. If the tenant does not leave, you will then need to submit an eviction application to the LTB and attend a scheduled hearing. If you obtain an eviction order after the hearing and the tenant does not leave, you will need to file an order with the Sheriff’s Office, as only the Sheriff can physically and legally remove a tenant. During this process, you cannot lock a tenant out, harass them, or cut off vital services such as heat, water, or electricity.
Property Management
Do I need to hire a property manager?
Your rental will always need a dedicated property manager, which is a role that you can fill yourself or hire a professional to do. The property manager will be in charge of scheduling regular maintenance, handling occasional repairs, communicating with tenants, and managing lease agreements. They will also track financial details, such as collecting rent and paying contractors. Ideally, they should be reachable 24/7 in case of emergency.
This can be a full-time role, especially if you have multiple rental properties to manage, so if you cannot or do not want to take on this role, it is best to hire someone with lots of experience who can help you protect your investment.
What is the landlord responsible for when it comes to property maintenance?
The landlord is responsible for ensuring that the rental is safe, liveable, and functional. This means maintaining key systems like plumbing and heating, ensuring appliances and locks work, and keeping common spaces tidy and free of hazards. To protect your investment, you should also be scheduling regular maintenance and checking that fire and smoke alarms are functional. Meanwhile, the tenant is responsible for keeping the unit clean and repairing anything they (or their guests or cohabitants) damage.
How much should I budget for property maintenance each year?
You can expect to cover regular wear and tear as well as emergency repairs for your rental unit, so it's a good idea to budget ahead for these costs. We recommend setting aside 1% to 2% of the property value every year for maintenance and repairs.
