How To Become A Landlord In Ontario | Ambler Real Estate Team

Most people I talk to about becoming a landlord start with the same question: “Is it actually worth it?” Short answer: it can be. A good rental pays down your mortgage for you, and over 10 or 20 years that adds up to real wealth. But I’ve also seen people buy the wrong property, sign the wrong tenant, and spend two years wishing they’d never started.

So if you’re wondering how to become a landlord in Ontario, here’s what we would suggest you consider first.

Start with the right property

Everything gets easier when you buy the right place. Everything gets harder when you don’t.

When clients ask us what makes a good investment property, We usually talk about three things before we even look at listings.

Who’s going to rent it?

A two-bedroom condo near a GO station attracts commuters. A detached house near a good school attracts families. A place close to a college fills up with students every September (and needs a different kind of landlord). Decide who your tenant is first, then shop for them.

Does it pay for itself today?

Not in five years. Today. Take a realistic rent, based on what’s actually leasing nearby rather than what’s listed, and subtract the mortgage, property tax, insurance, any utilities you’re covering, and something for repairs and empty months. I’d set aside at least 5 to 10% of the rent for maintenance alone. If you’re still in the red, that’s a hobby, not an investment.

What’s hiding behind the drywall?

An older home at a great price can turn into a new roof and a new furnace in year one. Get an inspection. Every time.

One more thing. If you’re buying a house with a basement apartment, or planning to add one, make sure it’s legal. Plenty of Ontario cities now allow extra units, but they still have to meet zoning, building and fire code. An illegal unit can mean insurance problems and real safety risks.

Interested in buying an investment property in Toronto? Read these blogs for more advice!

Learn the rules before you sign anything

Ontario is a tenant-friendly province. That’s not a complaint; it’s just reality, and the landlords who do well here are the ones who learn the rules up front.

Most rentals fall under the Residential Tenancies Act, and disputes go to the Landlord and Tenant Board (LTB). The basics:

You have to use Ontario’s Standard Lease for most residential rentals. You can add your own terms, but anything that goes against the Act doesn’t hold up.
The only deposits allowed are last month’s rent and a refundable key deposit. No damage deposit, and you owe the tenant interest on that last month’s rent every year.
Rent can go up once every 12 months, with 90 days’ written notice. If the unit was first lived in before November 15, 2018, the increase is capped by the provincial guideline. Newer units aren’t.
You can’t just change the locks. Ending a tenancy takes the right notice, a valid reason, and often a hearing at the LTB.
Repairs are on you, and you can never cut off heat, water or power.

A few other boxes to tick. Call your insurer and get a proper landlord policy, because a regular homeowner’s policy usually won’t cover a rental. Check whether your city requires a rental licence. And let your accountant know you’ve got rental income coming in. Keep every receipt.

How to find good tenants

If we could give new landlords one piece of advice, it would be this: don’t rush the tenant. An empty month costs you one month of rent. A bad tenant can cost you a year of it, plus legal fees, while you wait on the LTB.

Price the unit close to market, maybe a touch under. You’ll get more applications, which means more choice. Take photos in daylight and write an honest listing that covers what’s included, parking, laundry and the move-in date.

Then ask every applicant for the same things: a rental application, proof of income, references, and written consent for a credit check. Call the landlord before their current one, too. The current landlord might just be happy to see them go.

Be fair and consistent. Under the Ontario Human Rights Code, you can’t turn someone down because of things like family status, age, disability or because they receive social assistance. Decide on your criteria, write them down, and apply them to everyone.

And meet people in person. You learn a lot from how someone shows up to a viewing.

If all of this sounds like a lot, it’s worth knowing that many REALTORS®, including our team, can list your rental, screen applicants and prepare the lease for you.

Explore more catch-all real estate resources on my blog. Here are a few posts to get started:

A few first-time landlord tips

Things We wish every new landlord knew before their first tenant moved in:

Keep a cushion of three to six months of expenses. Something always breaks, usually in January.
Walk through the unit with your tenant on move-in day and photograph everything.
Fix things fast. Tenants who feel looked after stay longer, and turnover is expensive.
Give at least 24 hours’ written notice before you go in, unless it’s an emergency.
Open a separate bank account for the property. You’ll thank yourself at tax time.
Know your limits. A property manager, or a paralegal who handles LTB files, is often worth every penny.

Thinking about it?

Being a landlord isn’t passive income, whatever the internet says. But with the right property, a clear handle on the rules and a tenant you’ve properly vetted, it’s one of the best long-term moves you can make in Ontario.

If you’re weighing up your first rental, give us a call. I’m happy to run the numbers with you on a few properties and guide you on the feasibility of them becoming profitable investment properties.

Ready to explore Toronto’s investment market? Call (416-884-8027) or email (t eam@amblerhomes.com) to reach our team!

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