Ontario Landlords and Tenants

I'm going to post below an excerpt from a well connected and established mortgage broker here in Barrie who has owned multiplexes. His post is an excellent reason to showcase why it is so important to use those that specialize with Rentals. Not just someone that wears many hats and does not work specifically with Tenants on a daily basis. Why? Read below. There are some great tenants, don't get us wrong but get the wrong one? It will turn you off real estate investing and the reason why you will hear of "tenant horror stories". Who would you rather entrust your property with? (This is why it is our mandate at Shannon Murree and Team of RE/MAX Chay Realty Inc Brokerage in Barrie to work with Landlords to rent the properties and longstanding history of over 14 years. Why? We are real estate investors ourselves.) Ontario Landlord's perspective:

‎*Just curious, in today's climate for you Ontario LLs, how many months a typical loss ends up being? (not counting legal and sheriff fees, etc.)* Here is a typical example: This tenant only gave one month's rent ($1000) on move in: Rent is due on the first late on the second. On the second, you serve an N4 notice to the tenant to pay the rent owing, or move within 14 days. *If tenant moves out, you are out one months rent.* *If tenant does not pay or move in 14 days, you file an app with the LTB, if you are lucky, you get a hearing by the end of that rental month. If tenant shows up, several things can happen at the hearing: Tenant has real good excuse why he is late with rent (example job loss), so the adjudicator will force you to keep tenant on a payment plan. The arrears he owes you will be added in increments of $200 a month along with upcoming month's rent for the next 5 months. NOWHERE IS IT ALLOWED TO BE STIPULATED IF THEY DEFAULT, EVICTION IS IMMEDIATE! *If he doesn''t pay next month's rent along with the extra $200, you must file again with the board (it's free this time) and usually the tenant doesn't get a notice of hearing nor do you have to provide them with one. *The hearing date you get may be in 2 weeks if you are lucky (we are now into second month of no rent being paid) *At the hearing you explain your case to the adjudicator that tenant defaulted on a hearing order payment plan. So the adjudicator prepares a hearing order for eviction which is good in ten days (or it could be immediate-not sure) The hearing order gives the tenant 10 days to move out or landlord will hire sheriff. *Tenant gets this in the mail, they don't move out in ten days so you must hire the sheriff to evict on day eleven. *After hiring sheriff, within a few days sheriff goes and posts move out letter to tenant giving them another couple of days to move out. Tenant still does not move out. Sheriff comes back in a week to physically evict. Then you must keep tenant belongings for 3 days before disposing. I think this added up to three months. Add another month if they don't show for first hearing and filed for a review hearing (which will be granted) Add another month if your hearing dates are later (like 4 weeks after filed app instead of 2) or you call sheriff at Xmas (they won't evict for 2 weeks around xmas and this creates a backlog) Minus one month if you had received first and last month's rent from this tenant. Cost for hearings is $150, cost for sheriff $350. Cost for a paralegal to represent you is $400. Haven't even included damages or your time and aggravation as a landlord. But you go in to inspect for damages and the place is trashed. Thousands of dollars in cleanup and repair. YOU CANNOT FILE AN APPLICATION FOR DAMAGES BECAUSE HE IS NO LONGER YOUR TENANT! So you now have three months rent owing ($3000) plus $500 in fees to evict, $400 legal fees plus damages. Your ex tenant has flown the coup, so could be very hard to collect from them. But when you do have a hearing order with an amount for arrears of rent (and filing costs), it can be transferred to a small claims judgement (approximately $75) and you can fill out garnishment forms if they are worth garnishing and you know where they bank and/or work (for $100). These fees are added to the total judgement amount. Sometimes tenants that disappear, reappear on the radar. A small claims judgement is good for seven years and then you can renew it. It will also appear on their credit report. So as a landlord in order to recoup this cost you raise your rent for the next tenant and raise it every year and keep it high forever just in case this happens again.

Real Estate Investing Is So Intimidating!!

Oh, no you don't want to be a real estate investor! It's such a total nightmare. You can never find good tenants, they always damage the property, we're in a housing crisis, there's no money to be made. Ok, you can keep thinking that - it's ok because in the meantime there are others that see past all that and are buying the things you're not because of your fear and listening to the negativity of others. It's ok, while you keep reading the headlines other people are taking advantage of creating their wealth, building investment portfolios and having the opportunities come available to them every single day.

People think real estate investing is a nightmare and hear negative things about it all the time. Question, do you always listen to people and don't research things yourself? Real estate investings has been going on since the beginning of time and can definitely see how it's affected those people who have taken action and created wealth. IT'S NOT AS INTIMIDATING AS YOU THINK.

As our spending power decreases the people that are able to invest in properties are the ones that will see the results later on (if they have not seen the benefits already). Being well informed by research, asking questions, learning from other successful people, building a team of people that know what they're doing are several ways to be self-informed and gain confidence. One of the reasons why people engage in property investment is its relative stability. Generally property prices will increase (or appreciate) as time goes by. That being said, this is what the appeal of real estate investing in properties is.

If you're new "to the game" and have been thinking about it, outside of finding a "Geographic Specialist" (don't be influenced by the price and/or how low a property is); here are a few tips to help get you started and have a long term success as being a real estate investor - not a speculator:

Step 1: LOCATION

The location of the Property – This is by far the most thought about factor when deciding to invest in properties and one of the most important aspects of property investment. Why? It's one of the primary determining factors of how you are able to price it; (exit strategy/resale) and/or rent. When people are thinking about renting or buying property the first thing that will determine their choices is the location of the property. So basically if you are able to purchase property that has the following: close proximity to transit, shopping malls etc then you will most likely be able to attract more buyers and renters.

Step 2: HARD WORK – DO YOUR NUMBERS BEFORE MAKING AN OFFER- calculate rents and make sure the rents will justify your costs/expenses of owning the property. The worst thing you can do is overpay for a property and not calculate correctly the income/expense ratio and essentially, not getting enough rent to covers expenses and paying for the tenant to live there. That is not effective investing.

Step 3: BE PATIENT - you've calculated your vacancy rate so ensured you have that buffer. Know that in real estate investing and tenant placement nothing happens overnight. Even the best investment properties can sometimes take time to get people that are willing to rent. Regardless in whatever you do after you have done all that you can you need only wait till you get the best price for your property.

There are so many more tips that can be shared but mostly, look past the naysayers and ask yourself - are they in 9-5 jobs and are they wealthy? Stop only dreaming and continuing to be in the same mundane, daily routine. Real estate investing is not as intimidating as you think but it is truly important to have "experts" in their field that know what they're doing. It will be your business.

INVEST. BUILD WEALTH. RETIRE.



You can't do anything about the length of your life, but you can do something about its width and depth.


- Shira Tehrani

Action may not always bring happiness, but there is no happiness without action.

- Benjamin Disraeli


Life is a great big canvas, and you should throw all the paint you can on it.

- Danny Kaye