Great news for Toronto real estate investors – the Toronto housing market continues to thrive in its current “hot” state. With a vacancy rate hovering around just one percent over the last year and increasing rental prices, Toronto landlords have the luxury of being able to prosper in the hot market and to shop around for ideal tenants while also retaining them for longer periods of time.
Screen your tenants
With the rental market the way it is right now, landlords are able to pick and choose which tenants they accept. One way to ensure you’ll be renting your property to a reliable tenant is to request a credit history report with every application you receive. This will allow you to choose those with proven credit history, meaning that they’re far more likely to be responsible clients, and to pay rent and utilities on time and in full. This type of screening will also give you an idea of a tenant’s previous rental experiences, giving you a better idea of what they will be like as a tenant in your rental property.
Look for long term commitments
The current market favours tenants who are more likely to rent on a long term basis, largely due to the record low Toronto vacancy rates. Once a tenant has found a rental property that suits their needs, they’re far more likely to stick around rather than risk not being able to find another suitable home. Long term tenants will provide you with a reliable and consistent source of income, and will save you from having to search for another ideal renter.
Set prices right
With the demand for Toronto rental properties as high as it currently is, it’s tempting to set your property at a higher price than ever before without considering the many competitive elements at hand. Before you decide on a price for your rental, it’s important to research what other landlords in your area are charging for other similar units. From there, you can set your prices competitively so that you’re able to turn a profit and also ensure that your property is rented out quickly and by a tenant who is serious about your unit.
Once you have decided on and advertised your listing price, it’s important to commit in order to retain integrity as a landlord – last minute changes in price or terms will scare off potential tenants. Keep in mind that you cannot increase your rental price by more than the Ontario government mandates each year, and it is often a very low percentage that won’t cover things like increased utility costs – so don’t include utilities in rent if you can avoid doing so. If you can’t, make sure your rental rate accounts for projected utility cost increases for at least the next five years.
Play by the rules
This tip is a given, but bears repeating when faced with a market that’s in your favour. At times of increasingly high demand, it’s easy for landlords to lose sight of their responsibilities and obligations as property owners. It’s important that you play by the rules no matter what market situation you’re faced with – it’ll ensure that your investments will continue to pay off in the long run, and keep you safe from potential legal repercussions that come with not following the rules.
“Playing by the rules” means ensuring that maintenance is kept up on the property, tenant’s concerns are addressed rather than ignored (within reason, of course) and evictions, if necessary, take place according to the Ontario Residential Tenancies Act.
By following these tips, not only will you be able to quickly attract the ideal tenant to your rental property, but you’ll be able to keep them around for a long term period. Setting prices the right way, keeping up with your competitors and researching the state of the market, and playing by the rules will ensure that you’ll make the very most of this hot rental market.