Things to consider when purchasing a rental property:
1. Does a purchase make financial sense?
A minimum of a 20% down payment is required when purchasing a rental property.
Investing in a rental property should be considered a long-term investment that helps build capital.
Consider whether your real estate investment has the potential to provide a better return when compared with other investments.
You will have to pay land transfer tax – this is paid by the buyer when possession of the property is taken.
When you sell your rental property, you will have to pay capital gains taxes.
The First Time Home Buyers’ Plan and land transfer tax rebate for first time home buyers can only be applied to your primary residence.
2. How is the local rental/job market?
The number of rental properties for sale in a neighbourhood can impact the price you’ll pay.
A healthy and growing job market will likely spur demand for housing and may result in rising rental income.
A growing area with major improvement projects planned (like a mixed-use retail residential development, subway stop or health clinic) could make the location more attractive to potential renters
3. Landlord Duties
Landlords are legally obliged to ensure that a rental unit complies with the rules and regulations pertaining to minimum standards for:
Before renting a property, it must meet municipal standards, zoning bylaws, fire safety regulations, and local building codes.
You may need to obtain a rental license, which is required for any rental property with four units of less.
Landlords are legally obliged to ensure that a rental unit complies with the rules and regulations pertaining to minimum standards for:
Maintenance
Housing
Health & Safety
It is also the landlord’s responsibility to ensure that acceptable standards are maintained through the duration of the tenancy. This includes:
Maintaining the state of the home and ensure it is fit for inhabitation.
Ensuring a reasonable supply of fuel, electricity, hot and cold water and other utility services – unless the tenant has agreed to pay for these services.
Not interfere with the reasonable enjoyment of the premises.
Not seize, without legal process, a tenant’s property for rent default or for the break of any other obligation of the tenant.
Not harass, obstruct, coerce, threaten or interfere with the tenant.