In Ontario, tenancies usually last a year, however, if the lease has ended and the tenant has not given you notice, the tenancy will automatically renew on a month-to-month basis. Legally, a tenant must give at least 60 days notice that he/she will be ending their tenancy. But what rules apply to landlords and how do you go about giving tenants notice to vacate? If you have a rental property which currently has tenants but decide that you want to sell the house, a good rule of thumb is the more notice, the better. You can not contract “out of the law,” therefore, the guidelines and standards set by the Residential Tenancies Act or the Landlord Tenant Board must be followed.
If you decide you want to sell your house, giving notice to your tenant asking them to vacate the property in a month because you’re “thinking of selling your property” will not suffice. In this instance, the law does not work in your favour and the tenant is not legally obligated to move.
Let’s looks at a few situations:
You have been renting a condominiumunit to a very responsible couple who have been your tenants for three years. They’re currently renting on a month-to-month basis. You’ve spoken to a few people in the building and noticed that there is a demand for units, and they’re selling at a very desirable price. After doing a CBA, you decide that selling your unit would be more profitable than renting it out. Legally, you do not have to give notice to your tenants until you actually sell the unit, but you can let them know that it’s on the market. As a landlord, you must make a reasonable effort to inform your tenants that you’re going to show the unit to prospective buyers. Showings must occur between 8 a.m. and 8 p.m. In this situation, the couple is cooperative and tell you they’ve been looking at buying a property in another part of the city. Shortly after you listed the unit, it sells above asking and the closing date is two and a half months from today, February 25, 2015. Along with the correct forms, you give your tenants 60 days notice, which goes into effect on the last date of the rental period (February 29). They must vacate the premises by April 30. Since your closing date is May 16, it works out perfectly for you because you’re maximizing your rental income, and have a significant amount of time for your property manager to ensure the unit is clean and ready for the new buyers. You and the couple end the tenancy on great terms, and you start looking into other investment properties.
But what happens if you sell your property while your tenants are in the middle of a lease agreement? Legally, they are not obligated to leave until the end of their tenancy. You can tell them your situation and ask them to leave, compromising on a substantial amount of time. Hopefully, they are cooperative, however, if they are not, you can buy them out. Unfortunately, you cannot force them to leave unless you have grounds to evict them.
In any situation, it’s best to give as much notice as possible. Hiring a Toronto property manager to assist you with a tenant screening process will help decrease the likelihood of you encountering problems when ending a tenancy due to uncompliant tenants. Before you enter any lease agreement, carefully plan it out and consult your property manager for advice to ensure the decision you make is the right one for your situation.
In 2015, the average price of a detached home in Toronto surpassed the $1 million mark. Now that 2016 is here, many of us are considering selling our homes while the market is still red hot. If Selling your house is on your list of New Year’s resolutions, here is a list of helpful tips that will make the process of selling your home quicker and also less stressful.
Tips for Selling Your House in 2016
1. If the end of your mortgage term is drawing near, consult a mortgage professional about your options. Rates will probably not be this low for some time, so now is the time to seize the opportunity. If you’re in your first year of your term, review your agreement with your lender or financial institution. There might be a hefty payout penalty, so make sure the pros outweigh the cons before making any decisions
2. Are you downsizing? If you plan on using the proceeds of your home’s sale toward a new property, you will need to crunch the numbers and possibly review your budget. If you’re planning on upsizing, prepare for the increase in your mortgage payment. If you’re planning on a mortgage payment increase from $2300 to $2900, try taking an additional $600 a month from your income and put it in a savings account. Do this for three consecutive months and make this account off limits; this is an excellent way to test the waters to see if you’re ready for an increase in your expenses. If you find yourself stressing about the additional cost, you may want to rethink upsizing.
3. How have recent home sales in your neighbourhood been? Market conditions can change in the blink of an eye, so it’s wise to assess comparable homes anywhere between 2-3 months before putting it on the market. If homes sold over asking, find out what features or selling points that home had, and use the same approach when selling yours.
4. Clean and declutter your home a few months before listing. A crowded or cluttered space isn’t very appealing to potential buyers. A large storage room is a great selling feature, but if it’s jammed with things from the late 80’s, buyers won’t be able to assess the actual amount of space available. Sell things you don’t use on Kijiji or donate them to a great cause. The more you give away, the less you will have to pack, move and unpack.
5. Consult a professional home stager. Investing a bit of extra money in home staging can go a long way. Simple things like painting your walls and organizing furniture in a certain way can increase list price significantly, and possible draw multiple offers.
6. Stay focused on your goals. Indecisiveness can impair the selling process, which might cost you time and money in the long run. Get your planning team together and set clear goals and a timeline. Less stress should be on everyone’s New Year’s resolution list for 2016. Happy Selling!
It’s that time of year when many of us are feeling the holiday bloat from all the festive cheer we partook over the past month and are now considering our new year’s resolutions. While many of us are adding “lose weight,” “eat healthier” or “get to the gym four times a week,” we often forget that we’ve made these resolutions in the past, and were lucky if we stuck to them for more than a month. With 2016 quickly approaching, now is the perfect time to take a look at our spending habits over the past year to assess where we are financially, and set some clear goals or money resolutions for the new year. As some goals, such as planning your retirement may affect your loved ones, it would be best to sit down with your family to discuss them. Not only will your family be aware of your goals, but they can acts as accountability partners if you fall off track. Here is a list of some resolutions that you might want to add to your list—also, eating healthier is always a good resolution.
Create a new budget You and your family may have experienced a significant change in 2015, such as a new baby, purchasing your first home, or helping your child through her first year at university. Playing the guessing game can be tough as we might not know how things will play out until several months have passed, but try your best to sit down with a pen and paper and write out your expenses in as great detail as possible. Although it’s important to revisit your budget annually, try to visit it quarterly as this might help you adjust expenditures accordingly.
Take advantage of TFSA and RRSP contribution room If you haven’t maxed out your contributions in the past and have some money kicking around, why not place it in a TFSA or RRSP. Maybe you’ve landed a new job or received a promotion—and are receiving a higher income than last year. A smart way to ensure that money gets set aside is to set up preauthorized transfers to your TFSA and RRSP. You’ll thank yourself when tax time rolls around in 2017 and also feel accomplished knowing you’ve contributed to your nest egg or retirement.
Reevaluate your mortgage situation
Will your mortgage term be coming to an end before you have your house paid off? If you have three years left on your amortization, but paying off your home won’t be possible for another four years, you might want to consider refinancing options. Chances are mortgage rates are not going to get any lower than they are now, and if your term is up in four years, who knows how high the interest rates will be. Reassess your situation, take advantage of low lending rates and breathe a sigh of relief knowing you’re making the most out of one of your biggest investments—your home.
Teach your kids about budgeting
Whether you have a son in middle school or a daughter in university, it’s never too early to teach your child about the importance of budgeting. Take some time to sit down with your young one to discuss his or her allowance. If they’ve been itching to get that bike that Santa didn’t leave in their stocking, you can teach them how to put away a portion of their allowance, birthday money, or money from their paper route to buy that bike. If your child wants a bike by June, he would have five months to save for it. On top of lunch money, entertainment, a long-term savings account and even donations (we should teach our kids about philanthropy), figure out what is left every month/week and how much of it needs to go to the bike. For those of us with older kids off at university, check in to discuss their plans after post-secondary, as well as how much debt has been accumulated. Depending on the financial institution and repayment terms, help your child prepare for the next step after graduation. If your child is lucky enough to land a job after he or she graduates and if you’re planning on helping him/her with their payments, discuss a fair amount that needs to go directly to paying their debt.
Purchase an investment property
If you’ve been considering buying a rental property, early 2016 would be a fantastic time to do so. With rock-bottom lending rates that will undoubtedly rise in the near future, purchasing a multi-dwelling house is something you might want to consider. Investing rental in Toronto or the GTA can be a source of residual income with the population of the GTA rising with young professionals. If you have any questions, talk to a real estate investment expert who will point you in the right direction. Also, make sure you hire a property manager to ensure your rental home is in good hands.
Hey, Big Saver!
Some people are great at saving and before they know it, they have a piggy bank that’s bursting at the seams. If you find yourself maxing out your RRSP and TFSA contributions, and are satisfied with your investments, why not plan a paradise getaway or donate to your favourite cause. Treating yourself now and then never hurts, however, using your money toward meaningful experiences with your loved ones will create memories that are priceless.
The Priority Pyramid
Remember that when making a financial plan it’s wise to follow a priority pyramid to help employ the best strategies to successfully complete Operation: Financial Resolutions 2016.
Toronto Millennials are poised to take over the rental market. Are you ready for them?
Millennials: We’ve heard this term thrown around a lot lately, but who exactly are they and what role does Generation Y play in the real estate market?
You don’t need to have an inside scoop to know that Toronto and Vancouver’s housing markets are on fire. As a matter of fact, not a day goes by without an argument of a housing bubble (or lack thereof), or a major media company discussing foreign investment and housing affordability becoming increasingly out of reach.
Toronto Millennials feel the effects of the latter, as the likelihood of having $1 million on hand for a house is slim to none. The first wave of this generation makes up a group of young single professionals. Unlike their predecessors, it’s more common to see millennials in their late twenties and early thirties focusing on advancing their careers. If we look at Baby Boomers and Generation X, we would see people graduating, finding work, settling into an area, getting married and purchasing their first home all before the age of 30. The thought of doing any of that for someone from Gen Y would be overwhelming to say the least.
As for the younger Millennials, the right of passage to adulthood includes transitioning from post-secondary institutions and living with mom and dad to living in the real world. Property managers see an increase in this demographic coming to them for rental properties. Gone are the days where young adults dreams include white picket fences and 2.5 children. Millennials are less interested raising families and climbing the corporate ladder and more interested in seeing the world and being their own boss. If you get the chance to chat with someone between the age of 23 to 28, ask them what their one wish in life would be. Nine times out of 10 it would be to travel or sell hats on the beach.
To the average Millennial, renting vs. buying is the best way to save money in today’s real estate market. As many do not have existing capital or sizable assets, renting puts them at a much lower risk of losing money, should there be a shift in the market. Between a down payment and a mortgage, and first and last rent, losing a deposit isn’t as big of a deal as foreclosure is.
So far this post has taught us that the majority of Millennials will not be buying your property–got it. What we haven’t covered is a way to capitalize on this market. Essentially, Millennials are a landlord’s and property manager’s dream. They make up a market of people in seek of quality rental housing without a major time commitment or financial investment. These people are loyal to premium brands (i.e. Apple or Samsung, iPhone or Android), and if treated right, will make wonderful long-term tenants. They also like to share their positive experiences with their friends via social media and other short forms of communication that don’t require face-to-face meetings, which means more business for you in the form of referrals.
If you are a property owner, leave Marketing to the Millennials to the pros. As seasoned Toronto property managers, we have all the tools to stage your property to make it appeal to quality tenants, and ensure that your investment is in good hands. For more information on our Property Managment services in Toronto, or how we can help source quality tenants for your rental property, contact us today.
As the mercury continues to drop, families across the GTA begin to haul the heavy coats, mitts, toques and scarves out of storage. Preparing our bodies for the harsh Canadian is always a tedious task and a sad reminder of the cold months that lay ahead.
Just like our bodies, our houses need special attention during cold winter months. We all know that heating costs go up this time of year; however, there are steps we can take to save money as well as make our homes more energy efficient. Toronto Property Managers and Landlords, in particular, are faced with challenges, as we might have multiple properties to care for as well as tenants that need to comply with our energy saving initiative.
Some ways to save on energy costs in the winter are simple and require minor changes to habits while others may involve the purchase and installation of energy efficient units.
In Toronto, heating can account for up to 60 per cent of your electricity bill.
The following tips can help save you a lot of money, while not compromising the comfort level in your home.
Replace your old thermostat with a programmable one to manage your heating automatically. Energy savings will quickly pay for the cost of the thermostat in the first year.
When we’re sleeping or not home, a lot of energy goes into heating rooms that are not occupied. By setting the thermostat to 18°C when you’re asleep and –20°C when you’re not home, you can reduce heating costs by up to 10 per cent.
Once you have an efficient furnace, make sure to maintain it properly. Furnaces that are well-maintained run at full efficiency take less energy to run and can save you heaps on your energy bill. Clean or replace the filter monthly and have it serviced by a licenced HVAC professional once a year.
Draft space? Air leakage can account for as much as 25 per cent of your total heating costs. By caulking and weatherstripping windows, doors, dryers and other vents, you can decrease air leakage significantly. Even little things like installing insulated plates on electrical outlets can make a big difference.
Up to 25 per cent of heat loss is through windows. Older houses were with single pane windows, which are ineffective in keeping the warmth in and the cold out. As a temporary solution, plastic window covers can help reduce drafts and can be purchased at most hardware stores. You can replace the windows altogether with Low-E double paned windows. These windows contain argon gas between the panes which acts as a great insulator in both the winter and summer months. Although they can be pricey, they’re worth the investment in the long run.
Don’t waste heat. Close doors and shut off heat registers when you’re not in the room.
When you turn on your furnace, do not switch your thermostat to a hotter setting than you need. It will not heat the room any faster.
Increase the amount of insulation in your home to keep it warmer in the winter and cooler in the summer. The attic and basement represent as much as 15 – 30 per cent of your home’s overall heating and cooling losses. Make sure you add attic vents so hot air can escape.
Let the sun shine in. During the day, keep your curtains open to heat your home naturally.
Whether you’re looking to cut costs in your home or rental property, sharing the vision with your family or tenants can be helpful. Setting habits that fall into your kids daily routine can be fun and will give them a sense of responsibility. As for your tenants, engage in conversation with them through letters, emails, or direct calls. Be sure to ask for their feedback as this will build a stronger relationship with your tenants, and will allow for higher buy-ins in future initiatives.
In recent news, you may have heard rumours that buyers were “treading more cautiously” as they entered the fall market. The opposite couldn’t be truer in Toronto. This morning, Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported a record number of transactions for the month of September through TREB’s MLS® System. There were a combined 8,200 home sales reported for September 2015. This result was a 2.5 per cent increase compared to September 2014.
For the first nine months of 2015 TREB MLS® sales amounted to 80,331 — a record year-to-date figure. Furthermore, there was a 9.5 per cent increase compared to the first three quarters of 2014.
“We are on track for record home sales reported through TREB’s MLS® System this year. Barring a drastic shift in the economy over the next three months, total transactions reported by TREB Members in 2015 are expected to be at or near the 100,000 mark. This is a testament to the importance that GTA households put on home ownership as a long-term investment,” said Mr. McLean.
The MLS® Home Price Index (HPI) Composite Benchmark Price was up by 10.5 per cent year over year. The average selling price for all home types combined was also up by 9.2 per cent annually to $627,395. Growth in the MLS® HPI Composite Benchmark and the average price was driven by the low-rise market segments, including detached and semi-detached houses and townhouses. (October 5, 2015 –TREB)
New hope for buyers as supply of new listings in Toronto exceeds demand for the first time since January
In August, sellers continued to ride the wave of the GTA Housing Market, as Toronto home prices climbed 10 per cent. Last week, Toronto Real Estate Board President Mark McClean announced that GTA REALTORS® reported 7,998 residential sales through the TREB MLS® System for the month of August. In a year over year comparison, this figure represented a 5.7 increase compared to 7,568 sales reported in August 2014.
For the first time since January, the supply of new listings in Toronto exceeded the demand, however, active listings toward the end of August were still down compared to the same time last year. Although the increase in new listings is encouraging, it will likely take several months for the market to balance out. Until then, GTA housing market conditions remain in the seller’s favour.
“Buyers in the GTA remain confident in their ability to purchase and pay for a home over the long term. They see ownership housing as a quality investment that has historically produced positive returns while at the same time providing owners with a place to live in their chosen community,” said Mr. McLean.
Both the MLS® Home Price Index (HPI) Composite Benchmark and the average selling price for all home types combined were up substantially in August compared to the same period in 2014, an increase of about 10 per cent in a year-over-year comparison.
(Source: Toronto Real Estate Board)
Market Bears anxiously await a bubble to burst, however, if the health of the city’s economy serves as any indicator, this “bubble” is nonexistent … and crash? Not likely. As for residential sales, we can expect them to slow in the upcoming months, however, they will remain hot compared to markets in other Canadian cities – with the exception of Vancouver of course.
Thinking about buying an investment property in Toronto? You’re not alone. For years, savvy investors have been buying, renting, flipping and selling real estate in Toronto. Historically Canadians have always leaned toward real estate as a key investment and according to a recent study by TD Bank, several professional investors also consider their home as an investment. Not only is investing in real estate is an excellent way to build a nest egg, it also offers the security of a hard asset that you are in control of. Whether you’re a seasoned investor or a millennial interested in buying your first rental property, there are a few key things that you should consider before taking that big step.
1. Set realistic goals and stick to them
Begin by writing down a simple plan that will remind you of your goals for property investment. Are you buying this property as a long-term investment to secure your family’s future and your own retirement? Maybe you’re interested in renovating a dated property to eventually sell. No matter what your goal is, make sure that you’re certain of your intentions and that it will help put money in your pocket after all expenses are paid.
2. Do your research
A common mistake first-time investors make is purchasing a property without conducting the necessary research. There is a wealth of information that can be found online, however, a consultation with an experienced agent who can share his/her own experiences can help you weigh the pros and the cons of purchasing, and come to the right decision.
3. Borrow responsibly
Educate yourself on financing. Taking out a second mortgage isn’t as easy as your first, and when buying additional property, a minimum down payment of 20 per cent is required. Talk to your broker or bank to determine how much you can realistically borrow. It’s good to be optimistic about your property’s income generating potential, however, when it comes to borrowing, biting off more than you can chew can add unnecessary stress and strain.
4. Home Inspection
Be sure to have the property inspected by licensed home inspector. This is especially important if you’re buying an older property. For advice on repairs or renovations, hire a contractor who you can trust—if you know of a friend or colleague whose home had recently undergone impressive renovations, ask to be referred to their contractor. You want to get the most out of your investment and by simply updating an older property, you not only raise its market value, you can increase your rental prices, thereby generating more income.
5. Hire an experienced and reputable Property Manager
Property managers can help you find suitable tenants. They can perform screening and background checks, as well as deal with any ongoing maintenance, repairs, or complaints. Property managers can offer useful advice in regard to pricing and marketing your property to maximize its appeal.
6. Stay Organized
Keep all of the property-related income and expense records organized and separate from your personal finances. When it comes time to file a tax return at the end of the year, you won’t have the stress of having to track down those reports amidst other piles of paper.
7. Location, location, location
You want to purchase a property in an area that is close to amenities, has a high Walk Score and is easily accessible by major highways, public transportation or both. Be sure to research other rental properties in that neighbourhood—property investing is a business and you should be aware of your competition. If the location is saturated with rental properties, particularly vacant ones, you should look elsewhere.
Trust your instinct. Don’t be afraid to walk away if the property doesn’t feel right or work for you, no matter how much time you may have invested in the process. The perfect opportunity will come your way–remember, when one door closes, another one always opens.