In Ontario, if I buy a building with significantly low rents, how do I raise them in light of the restrictive landlord laws?
We raise rents as permissible by laws. Most of our increased rent rolls come from tenant turnover, where we can raise rents to market levels. We first start with utilizing the tenant laws in our favor by enforcing on time rents, and any other tenant laws that are being ignored. With the buildings we acquire, we see between 20% to 50% fall into this category when they move out. There is also natural movement where another 25% to 40% will give notice and move. The other option is to offer money to move out.
2 ways to increase rents:
- Wait until a renter moves out.
- Negotiate ending tenancy with the renter. This can be helped by offering suggested alternative units, assistance with, or cost of, moving furniture, coordinating upgrades and customization to a new suite, and direct cash.
I.e. “We’ve found an opening for you at an apartment next door. If you agree to sign off on this End Tenancy Form we’ll:”
- have painters paint the new unit a color of your choice,
- have workers move your furniture to the new suite, and
- provide you $1000.”