As the owner of an investment property, you look at that rental property as just that: an investment. This means that you have a motivation to make a profit off the property, and why not? That’s why many people get into real estate. What’s important to understand about making the most of your rental apartment or rental home, is that raising rent is an integral part of making your profit. In fact, the hotter the market, the higher the rent, especially when vacancy rates are low. This is because the demand for housing in the Toronto area is extremely competitive. Not only is it important for maximizing your investment profitability, but it’s vital to the resale value of your property. However, there are guidelines and rules for raising the rent for your tenant.
- Notification – A landlord must give their tenant notice of a rent raise. You must give your tenant 90 days written
- Timing – A landlord can only raise the rent once every 12 months. When it comes to rent-geared-to-income housing, there are some exceptions to this rule.
- Amount Guidelines – The landlord can only increase the rent by the annual rent increase guideline amount set by the Ministry of Municipal Affairs And Housing. The annual rent increase guideline is based on the percent change in the Ontario Consumer Price Index during the previous 12 months. Typically the annual rent increase guideline amount is between one and three percent.
When it comes to raising rent in order to increase profitability off your rental property, there are many more guidelines. Stay tuned to our next blog for more information on this subject. And if you have questions about rent in Toronto, contact local property management companies.