Posts tagged with: rent

How Does Ontario’s Housing Reform Plan Affect Mississauga’s Real Estate Market?

July 4, 2017 - Updated: July 4, 2017Real Estate Market

 

Earlier this year the Ontario government made an announcement of their fair housing plan.  They were going to address sky rocking rental rates, curb foreign speculation in Ontario, and tackle the problem of “property scalpers”.  It’s been about couple months since the announcement, but how has Mississauga real estate been impacted?  Let’s look at each situation separately.

 

Affordable rent in Mississauga:  Year over year severing both landlords and tenants in Mississauga I can tell you from experience that the rates for rent are going up with little to no end in sight.  A two bedroom condo for example may only be $1,700 to $1,900 per month to rent just a couple years ago.  Today I can safely say the majority of new listings for rent are now over $2,000 per month for a 2 bed condo.

 

The new reform extends the rent controls on all buildings made before 1991 to all current properties and any built in the future.  This should limit massive price increases year over year for existing tenants.  However, if the existing tenant vacates the property, the landlord can still choose whatever price to ask for from the next tenant. In Mississauga condos rarely go un-rented even the trashiest of properties eventually get leased.  Simply put there is more demand than supply.  This leads to sometimes bidding wars for rent and while not common, some landlords turn away perfectly good tenants for better ones they hope will come along. 

 

Deterrents for foreign buyers and speculators. Made famous out west where foreign investors would treat the Vancouver real estate market like short term stocks, these reforms aim to stop any speculation here.  I’m not going to say it doesn’t happen at all, but I have yet to see it for myself.  The government will add a 15% tax on foreign buyers in the attempt to discourage them.  I am sceptical that the problem in Mississauga is the same as Vancouver, but there is no denying there is huge amount of Chinese money in certain areas of Ontario.

 

There are reports from out west that after the foreign buyer tax was installed sales dropped.  Then recently spiked again indicating maybe foreign buyers were just waiting to see what would happen then jumped right back into the market.  As most of my buyers are not foreign investors I haven’t seen this impact first hand.

 

In addition to the “speculation tax” the Provincial government will team with the Canada Revenue Agency to make sure tax is paid properly from the buying and selling of real estate.  This is huge as many local investors have been getting away without paying taxes on investment real estate mainly due to the lack of resources the CRA has.  Having recognized the obvious potential for revenue the Government has targeted real estate investors with audits to collect on taxes never paid.

 

To date there seems to be a slowdown in the Mississauga real estate market, where once there was bidding wars everywhere…now it does seem like negotiations have normailized. Detached homes are selling, but other homes are sitting on the market for over a month and seem to be on the market a very long time when compared to the first three months of the year.  These homes probably are not the target of foreign investors so I can only speculate there is a psychological block amongst Mississauga buyers at least for these more affordable homes.

 

The early result of the fair housing plan is that the Mississauga real estate market has felt its impact.  In terms of the stated goal of cutting back scalpers and controlling rent I don’t think the plan has fully hit its mark in the case of the latter.  As for the former I would say it’s probably over stepped the intended objective and put plenty of would be sellers in jeopardy of not selling in time for their goals or worse, not meeting their commitments if they purchased a bigger house first.  If there is some conclusion I can find it is this…Buyers, this is a great time to buy a house and Governments need to stay away from messing with the natural course of real estate markets for political points.

Tagged with: condos houses buying selling mississauga real estate market rent todd lee

So You Want To Buy An Investment Property. But Are You Ready To Be A Landlord?

May 23, 2014 - Updated: May 23, 2014Buying Real Estate

buy investment property

Why do you want an investment property?  To make easy money right!  Here are some things to consider when you are buying an investment proeprty.

 

Positive cash flow

How profitable will being a landlord really be?  The landlord has to ask themselves if they want positive cash flow and figure out if the money earned will exceed the money spent on being a landlord.  Consideration to the local rental rates especially to similar properties is required to properly ascertain potential gross income.

 

Will a reasonable rate minus the cost of leasing the unit be worth the while?  Costs can include regular maintenance costs, condo fees, insurance, property taxes, mortgage payments cost of gas travelling to and from the leased unit and realtor fees. If after all this accounting is done for all the potential and likely cost and the numbers are in the black then you will have positive cash flow.

 

If the landlord is buying an investment property they must consider the consequences to personal income tax; if it’s a condo apartment, what rules may not allow for the rental of the unit or make living there more difficult for potential tenants (i.e. not pets allowed); if the landlord is a new home buyer, are they aware they will lose first home buyers benefits when buying their first home to live in; if buying a house to rent out, does the house meet zoning rules, municipal bylaws and health, fire and safety codes.

 

When buying an investment property the landlord needs to consider what tenants are looking for and what they will pay higher rents for.  Do you buy a turnkey situation where the condo or house is already updated or do you get affixer-upper and do renovations which will save you money on the sticker price but will cost thousands to bring to standards?  Depending on the landlords ability to do construction themselves or to get it cheaply done perhaps buying the turnkey property is more appealing.

 

How will you go about in getting a tenant?  The landlord has to consider trying to find a tenant by themselves or through the use of a real estate sales person.   If the landlord tries to rent for themselves they have to find ways of marketing their property so potential renters will find them.  The landlord will have to qualify potential tenants, do negotiations and right legal documents by themselves.  If the landlord is inexperienced they might make critical mistakes which can lead to big headaches, legal cost, time spent away from work etc…

 

 Using a realtor does cost money for their service, but on the other hand they qualify potential tenants, market the property through the realtor network by using the MLS and at the local brokerage.  They make arrangement for other realtors to show the unit to renters in the form of showings.  And finally they help the landlord with the legal paper work and negotiations.

 

Tenancy agreement

But wait! Do you need a written tenancy agreement?   The quick answer is “no”. However, the proper answer should be “yes”.  Look at it in this way.  If a problem arises which leads to having to go to court, not having a written agreement becomes harder to prove who’s right and wrong.  With a written lease clearly laid out, it should be very clear to all parties what their obligations were.

 

The tenancy agreement is therefore very important and hiring a realtor will aid in making an iron clad agreement as they would have the expertise to know what “rules” are allowed and which are not.

 

Landlord’s responsibilities

Who is responsible to maintain the unit?  The landlord is responsible to maintain the unit and ensure it’s in a good state.  This is true even if the tenant was aware of problems before they rented the unit.

 

To try and get around this some landlords put a clause stating it’s the tenant’s responsibility but the law does not see it that way.  It’s still the landlord’s obligation.

 

But, the tenant is obliged to keep the unit clean and to a standard that most people consider ordinary cleanliness.  Also, the tenant must pay for or repair damages to the unit caused by the tenant or their guests/other people living in the unit.

 

What about snow removal?   The Act generally states the property must be kept such that it can be safely entered and exited.  Failure to keep the property clear of snow might be a breach of the Act.

 

Garbage removal is a point of negotiation between the landlord and tenant.  Once an agreement is reached it cannot be changed without the consent of both parties and if the change results in less service for the tenant than a rent reduction can happen.

 

Does the landlord have to renovate the unit?  The answer is no.  The law does not force the landlord to “update” living conditions such as replacing carpet or freshly painting the walls.  The landlord is however responsible for keeping the unit safe and habitable therefore in certain circumstances, renovations might be necessary for safety reasons.

 

Entering the tenant’s unit

When can the landlord enter the tenant’s unit?  The landlord may only enter the tenant’s unit under specific circumstances.  Mostly the landlord will give the tenant 24 hours written notice, which will state the when and why they will enter.  Exceptions to giving notice are in an emergency or if the tenant agrees to allow the landlord to enter the unit.

 

Can the tenant refuse to let the landlord in after giving notice?  The Act allows the landlord this lawful right thus a refusal by the tenant can lead to the landlord giving them notice of termination and lead to the eventual eviction of the tenant.

 

If you can read through all of these questions and after answering them for yourself you are still positive about being a landlord then go for it.  If you come away y thinking that seems like too much work which you might not be willing to commit to then there are other ways to making money in real estate which might be for you.

 

Getting rid of bad tenants

What happens if you lease to a bad tenant?  There are rules to be followed and every circumstance is treated individually.  If after trying to work with your tenants to correct the “bad” situation and the circumstance continues I would recommend that you contact the Landlords and Tenants board for advice on how to deal with the situation.

 

Conclusion

Buying an investment property can at times be very profitable and very easy if the right tenant is found. A real estate agent can help you to find the investment property (for free as the seller pays the agents), place an offer for it, negotiate and prepare all necessary paperwork and walk with you through the whole process.  Realtors will also be able to help you to get qualified tenants reducing the risks of getting a bad apple, do the paper work and negotiate for a small but reasonable fee usually one half months’ rent.

 

Being a good landlord can also help you keep good tenants which means less headaches, less turnover and less time and money wasted.  Remember if you treat people with well they probably will treat you the same way back.

 

By Todd Lee

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Tagged with: investment landlord rent tenant condo house

The Mississauga Condo Market Dominated Peel Region Rentals Again.

June 24, 2013 - Updated: April 18, 2014Real Estate Market

    According to the Toronto Real Estate Board, Mississauga condos accounted for 540 of the 566 total transactions in Peel Region for the first 3 months of the year.  The city of Brampton mustered only 25 total leases. Caledon which is not known for condos managed only one lease.

    Of the 540 Mississauga condo rental transactions, 279 involved one bedroom condos at the average lease rate of $1,394.  Two bedroom condos were the second most popular among leases totaling 242 transactions at a rate of $1680.  There were 1,160 total condos listed at that time making for a list to lease ratio of 47%.

    By contrast the city of Toronto totaled 3339 condo leases during the same period.  One bedroom condos went for an average of $1,647 while 2 bedrooms brought in on average $2,250.  Toronto landlords listed 6863 condos making for a list to lease ratio of 49%.

    Some key numbers reported by TREB in their First Quarter Market Report was the GTA saw a 13% increase on a year over year basis for condominiums rented.  The 1 bedroom average monthly rent for condos was up almost 4% at $1,597 when compared to Q1 of 2012.

  According to TREB, the 2012 Fall Rental Market Survey indicated that Peel contributed 22.7% or the GTA condo rental transactions while only having a vacancy rate of 0.6%.  On the other hand Toronto accounts for 23.6% market share while having more than doubled the vacancy rate of Peel at 1.4%.

What does this mean for a Mississauga condo investor?

    The numbers don’t lie.  There are lots of people trying to make money as indicated by the share volume of listed leases.  Even though the lease to rent ratio is sub 50%, landlords who do lease their condos are making more money.

    This is can be attributed to a couple factors.  Perhaps renters are looking for nicer accommodations with modern renovations.  Some condo owners may need to invest some money to make their condo more desirable.

    Another factor in some condos not being able to get a lease is location.  Certain locations are attractive because of amenities which are nearby which tenants want.  Access to public transit and conveniences are a big draw for people.  Square One condos are a prime example of this and condo fees can be higher than in other parts of Mississauga.

What can be the future for Mississauga Condo renting?

    In my opinion the trend probably won’t change over the next year.  There seems to be no shortage of condos on the market right now.  The condos which are competitively priced with respect to location, size and have the fit and finish tenants are looking for will have no problems attracting business.

    On the other hand landlords who expect top dollar for run down condos will eventually have to make a decision to get out of the business or spend the money to make their potential tenants happy.

By Todd Lee

Tagged with: real estate market rent rental condos mississauga peel landlord tenant

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