Real Estate Talk

So You Want To Be A Landlord

By Jay Lough Hayes, Peterborough Realty Inc. 705-772-1025

You have worked, saved and now invested in a second property. You have the keys to your new property that you plan to rent out! Congratulations! You are now a Landlord!

You plan to rent to a good family that will sign a Contract agreeing to pay their rent on the first of every month. The Contract will say that utilities are paid by the Tenant along with keeping the property in good of condition, as when they took possession. Sometimes, the Tenant will make agreed to improvements.

You then do due diligence to find the perfect Tenant. Mission accomplished! Mr & Mrs Right Tenant sign the Standard Ontario Lease Agreement. Usually the Landlord gets first & last months rent.

You are now a landlord. And that is the last time you see any rent. Quickly, you are out of pocket thousands of dollars. But, to take the Tenant to court you must pay court costs and wait for the Landlord and Tenant Board to hear your case. Currently, it takes between 8-16 months to hear a case plus 4-6 months to issue an eviction. Your Tenant knows this all too well. The Ombudsman is now investigating the backlog of unheard 32,000 cases. That’s unfair.

In Ontario, it appears the governments’ answer to solving the housing crisis is to put the burden on the Landlord. Just because you have a second property doesn’t mean you are rich but that is how you are perceived. The government takes too much time to evict for non payment of rent. You must also continue paying for heat, hydro & water. In court you are on your own, without complimentary legal advice, but the Tenant is offered free legal advice. Next, the opportunity to settle out of court gives the Tenant more time to stay rent free for 6 months more. The court doesn’t want to evict, but if they do, you pay the sheriff (who doesn’t work everyday or even every week) to evict them. When you get the keys back, your property is most likely a mess. Lately, this process can take a year to a year and a half. With criminal law, if you steal a car or rob a bank there are chargeable offences. But, civil law involves ‘Breach of Contract’ - the contract you signed so many months ago.

Once you win your case, you have the right to sue the Tenant, but it is usually more money than the Tenant will have. So, quite often, you take your win and walk away.

As a Landlord, you must do due diligence. Having worked with Landlords and Tenants, maybe 6 Landlords actually called to get information about their potential Tenant. That is bad business. And, far too often this experience leaves such a scar on the Landlord that they decide to sell the property.

If a Tenant is unable to pay the rent, consider:

1) Living at home with your parents. If your parents want compensation, offer to do things around the house for them in lieu of rent. That’s fair.

3) Rent a large house with lots of bedrooms. Then rent each of the bedrooms out. Share the house and all the expenses. That’s fair.

4) Buy a property and rent as an Air BNB. That’s fair.

5) Buy a home and rent out rooms. That’s fair.

6) Get a job as an on-site property manager – likely for an apartment complex. Often, at least part of the compensation is free housing. That’s fair.

7) Get a job as a live in nanny. That’s fair

8) Get a job as a live-in caretaker. That’s fair.

9) Buy a camper and live in it. That’s fair.

10) Join the military – that’s very fair. And thank you for your service!

Jay Lough Hayes has been a real estate sales representative for 37 years and services the Peterborough, Victoria, Durham, Northumberland Counties and all points in between. We would like to thank Jay for her committment to A Taste of the Kawarthas magazine and her wonderful honest, straight-to-the-point insightful column over the past 4 years.

Although Jay is retiring from the column, we wish her all the best, and Karen Irvine (our Editor) wants you to know that “this doesn’t give you a pass from our weekly breakfasts! See you at Chef Basel Cuisine!”