What homebuyers should know about rental units
If you are thinking about supplementing your income with a rental property or unit, you should work closely with real estate lawyer to anticipate these following issues:
Legal vs illegal rental unit
Provincial and municipal laws determine whether an apartment is legal or not. Things to consider include: what the unit is to be used for., wherether there is legal parking, rules surrounding miminum square footage and # of units allows by zoning, legality of rent charged and condition of the property and required repairs.
Income stream is not guaranteed
If there is ouststanding repair work required, a landlord may not be able to increase the rent for a new teneant unit the reapirs are done. Depending on the rules f the specific province, if the property is not well mentained, tenants can be obtain a rent freeze or apply for reimbursement for costs associated with repairs.
Don't count on raising the rent whenever you want:
Exisiting tenants may already have leases that limit when and how the landlord can raise the rent. Although rent incerase can usually be taken once a year, there may be comlicated legal requirements in terms of the form to be used and how it is to be delivered. In some cases, the amount of the increase may also be limited by law.
Ontario rent increase guildelines
There are condo specific issues:
Most condominiums corporations have restrictions about unit owners rentinig to tenants. Most allow rentals as long as tenants abide by building by-laws and rules.
Other things to keep in mind:
Houses were rooms are rented that share a kitchen and bathroom are often considered boarding houses and may fall under different laws and requirements. Also,renting part of your home may affect the tax treatment of your principal residence by triggering a sale for tax purposes or loosing part of its tax-free status for capital gains purposes.