Back to school. Back to work. And back to selling income properties. The Toronto real estate market will roar back to life this week as many agents start listing properties for sale this fall. There were fewer houses for sale this summer as we expected, although prices and demand held steady. Last week two semi-detached homes in Leslieville traded in the $900K range on multiple offers, so there doesn’t seem to be any decrease in prices or demand.
This month I will be embarking on an interesting project. After seven years I will be rewriting (or perhaps re-editing) my “Live for Free” book. The Toronto market has changed considerably since my original publication and many of the concepts simply do not apply any more. I’m looking to create the ultimate guide for landlords in Toronto – something that will cover all the ins and outs of successful income property ownership and management. It will be available free to anyone who wants it as a digital download, so I will let you all know when it is ready. Remember that you can always get tons of good information, tips and strategies at plex.ca.
Where are the best income properties in Toronto?
If you have decided to buy a duplex or triplex, whether to live in or just for investment, you have to decide what area or neighbourhood suits you best. In Toronto, most of the rental stock is south of Highway 401, with a large percentage of income properties located south of Bloor Street. That doesn’t mean that you can’t plexes at Finch or Steeles, it’s just that most of them tend to be in the downtown central core. You can also go into Scarborough in the east and Etobicoke in the west, but again most of the inventory will turn up somewhere in between them.
The criteria for the ideal location are going to vary from one investor to another. Some folks like to have their properties close to where they live for easy access. Others like to go where they stand the best chance of finding tenants. The fact is that you can rent anywhere. The rental market is that good in Toronto. Some people like to choose areas that they think are going to have the best long-term upside. Again, recent history has shown us that all downtown areas are strong, with all of them seeing their average sale price increase. It was just reported recently that the average price of a detached house in Toronto has gone over a million dollars. That clearly demonstrates that pretty much all the downtown neighbourhoods are worthy of consideration.
In my experience there are a few specific locational factors that might help you in your quest to find the right location for your income property:
1. Proximity to the subway
This is pretty obvious. A lot of people use the subway to get to work or to head downtown where car parking has gotten prohibitively expensive. While you are always going to be close to a bus or streetcar stop, there is an inherent benefit to being on the subway line. Note how development erupted at Bayview & Sheppard once the subway was built. This makes areas like the Annex, Bloor West Village, the Danforth and other spots directly on the subway line one of your best options.
2. Proximity to the University or Downtown Colleges
One of the largest pools of renters is students. If your duplex or triplex is located within walking distance to U of T, George Brown or Humber College then it will always be very attractive as an investment. There are always students looking for rental accommodation close by.
3. Proximity to Coffee Shops, Pubs, Shopping, etc.
It is always desirable when your property is within walking distance to shops, restaurants, and other amenities that renters can enjoy. Remember that a lot of renters will not have a car so they will rely on public transportation or being able to walk to things. This is why retail streets like Queen (east and west of Yonge) or Gerrard/College will be always be good choices.
Evicting Tenants for Landlord to Occupy the Premises
A couple of clients called me this month for clarification on the rules for ejecting their tenants for their own use. Remember that you can only evict someone if you or your immediate family (mother, father, son or daughter), intend to take over the suite. Here is the lowdown again, taken from one of my earlier newsletters this year.
If you decide that you would like to move into one of your rental units, you are entitled to evict the tenant that is currently occupying that suite only at the end of their current lease term. In other words, you can’t ask a tenant to leave until their lease is over. There are no exceptions to this. You also have to give that tenant at least sixty (60) days prior written notice. If the tenant is month-to-month you still have to give the full sixty days notice.
Perhaps the most important thing to remember is that you must use the correct and prescribed forms as is set out in the Residential Tenancies Act. In this case
the form is called an N12 – and it must be filled out correctly. The form is available in PDF format here
If you do not follow these rules, the tenant can refuse to leave and you may be forced to get an eviction judgment from the Ontario Rental Tribunal – which has been created for the express purpose of mediating landlord/tenant disputes.
If you are not sure how to proper to fill out this form, please contact your lawyer or give us a call and we will happily guide you through the process.
Here are the YTD housing numbers for the GTA
as provided by Toronto Real Estate Board:
Overall monthly sales volume continues to outpace last year. Stats for August will show this trend continuing. Expect sales volumes to be robust until the end of the year.