With the number of condo buildings going up in downtown Toronto, renters are flocking to get a piece of the action, so you should be thinking about renting your Toronto condo, why not? We have slowly seen a shift of people wanting to rent in apartment buildings to wanting to rent in condo buildings. A lot of these condo buildings are newer, with shiny wood floors, stainless steel appliances and granite counter tops, not to mention the amenities in these buildings which is definitely appealing to the younger generation. Generally the vacancy rate in condo buildings is lower then 1% in comparison to apartment buildings that are experiencing vacancy rates of 3%-4%. Renters are willing to spend more money per month on rent versus your traditional apartment buildings for these luxuries and conveniences of living close to their workplace and being where all the action is like restaurants, bars and clubs.
Having said that, it’s a great time to take advantage of this market and cash in. If you currently own an investment unit in downtown Toronto and are thinking of renting it out, here are a few tips you should follow to ensure you get the best possible tenant. Remember in the province of Ontario, the tenant has a lot more rights then a landlord, it’s not that easy to kick out a bad tenant.
- Credit check is key! Seeing someones credit check gives you a sense for the person’s credit worthiness, are they paying their bills on time, have they accumulated a lot of debt and living off credit? Also do they have any current judgments or collections against them. If so, how do you expect them to pay their rent on time. You can direct potential tenants to Equifax or Transunion to pull their own credit, it’s a soft credit check so it does not affect their score in the future and make sure they give you the full report, not just the score.
- Landlord Reference, yes please! Don’t be afraid to ask any potential tenants for their last 2 previous addresses and their landlord contact information. Also ask them why they moved, was it the landlord or the tenant deciding on the move. Once you have this information, actually call the landlord and ask them how the tenant was. Were they disruptive, were they extremely messy, what condition did they leave the apartment in. This again gives you clues as to the character and cleanliness of the tenant.
- Job letter, I think so! Once again don’t be afraid to ask for a current job letter stating how long they have worked at their current job and how much money they are making. This shows you the stability of their position. If they just started a job, they are most likely on a 3 month probation which means they can be fired any time without a reason, which means no money for rent. Also it will give you an idea if they can even afford your condo. Lastly, make sure to actually call their place of employment to verify they actually work there and are making the money stated on the letter. With such computer programs like Photoshop and Illustrator, anyone can make up their own employment letter
- Personal References, always good! Again ask your potential tenant for 2 personal references, which can either be friends or family and actually call them. This, again gives you insight to who these tenants are as a person and how they will behave and treat your condo, which is your investment and potential retirement money.
- Landlord and Tenant Board should be your new BFF! Like I mentioned previously, tenants in Ontario have a lot more rights then landlords when it comes to almost everything. Therefore, as a landlord you should know your rights too and the processes for dealing with certain situations with tenants. Getting yourself familiar with the Residential Tenancies Act is a good start as well as knowing there is help out there through the Landlord and Tenant Board (LTB). The LTB’s website is very informative and user friendly, you can also call them to ask various questions. As a landlord you must always think of the worst case scenario and be ok with dealing with the situations that may arise. If not, then it’s time to grow a backbone.
Although this may sound like a lot of time consuming work, in the end, isn’t it worth it for a great tenant. A few hours spent now, can save you a lifetime of headaches later. Not up for the job, then hire a Realtor, we will take care of all of this for you. If you are thinking about renting your Toronto condo, don’t hesitate to give me a call 1-416-707-1209