August 30th, 2018
Being a landlord is a great way to generate passive income. However, there’s more to it than finding a tenant, then turning your attention away and collecting a cheque every month
In addition to actions required on a per request basis, such as repairs or meeting, there are times you’ll need to be proactive to ensure you’re getting the best return on your investment. Jot down these important dates to make sure you’re always on the ball.
If new tenants are incoming, a landlord is free to change the cost of rent to whatever they want. However, if current tenants are renewing their lease, a landlord in Ontario is permitted to increase rent just once every 12 months.
There are rules and regulations determining when and by how much a landlord can increase the cost of rent. One major point to remember is that the maximum amount is determined by the Ontario Government, which uses the Consumer Price Index to set the cap. In 2018, for example, the limit was 1.8%. Another major point is that tenants must be informed of the rent increase 90 days prior to it going into effect, qualifying the corresponding date as one to remember.
If you’re planning to raise rent, make sure you give 90 days’ notice. As an example, say you acquire a tenant on October 1, 2018. The earliest you can raise rent is on October 1, 2019. But in order to do this, you must give the tenant written notice of the increase three months earlier – July 1, 2019 (technically July 3 would be 90 days, but most landlords are more pragmatic). If you miss this date, you won’t be able to increase rent until the next time payment is due – presumably November 1.
When you work with GTA Landlord, we’ll send you a reminder for this date. If you’re not working with us, be sure to set your own reminder so you don’t miss out on extra income.
All landlords should have landlord insurance. It’s also helpful – and you can make this a condition for any prospective renter – that your tenants have renters insurance. Together, these coverages protect just about every component of a unit and the belongings within it.
Be aware of when your own insurance policy is going to expire. Typically, insurers will auto-renew policies so you don’t have to do anything to stay insured, but it’s a good idea to price compare at this point to see if you can save money by switching providers.
If having renters insurance is something mandated by the lease your tenant signed, it’s also important to know when their policy expires. This way you can get updated confirmation that they’re still insured.
Most renters insurance policies last one year, so if the tenant purchased the policy to cover them from their move-in date, it’ll be easy to remember. If, however, a tenant is moving from another rental property for which they already had renters insurance, their policy may not align so nicely with their move-in date.
Either way, it’s important to know when your tenant’s insurance coverage expires so you can confirm they are still protected.
For a standard one-year lease, the earliest a tenant can leave without incurring a financial penalty is 12 months. After this, many leases move to a month-to-month agreement.
Whatever the particulars of your own lease, in most cases, a tenant is required to give 60 days’ notice prior to departing.
This means that, usually, the earliest a tenant can give you notice is 10 months after moving in. There are some exceptions to this rule, but 10 months after the move in date is the day you’ll want to circle on your calendar. This will prepare you for the earliest possible date you’ll need to start looking for a new renter.