For properties that fall under rent control, landlords can only increase the rent each year to the maximum percentage that has been set by the Provincial guidelines.
There are many newer properties that have been built in Ontario after November 2018 – properties that have been before this date fall under the rent control guidelines.
Now, of course, landlords who own a property that does not fall under the rent control are at a greater advantage as there is essentially no limit to the increase they can set. However, Landlords should be mindful that there can be conflicts and drawbacks for their tenants if the rent is increased by a large amount, for example:
- Tenants may not be able to afford the rent if increased by a substantial amount.
- Tenants might have drawbacks and this may cause conflicts
- Tenants may decide to terminate the lease and Landlords will have to deal with financial loss due to potential vacancy
If Landlords are thinking about increasing the rent, here are three ways to serve and increase rent to make it justifiable and fair to both landlords and the tenants:
1. Improving Amenities and Services
Enhancing the amenities and services offered to tenants can justify higher rents. Consider upgrading or adding new features that significantly improve the living experience at the property, such as:
- Including utilities in the rent amount – wifi, hydro, water
- Laundry Facilities: Adding in-unit laundry or upgrading communal laundry facilities.
- Recreational Areas: Creating or improving common areas like outdoor spaces
- Offer additional parking if needed
2. Rising Operating Costs
Operating costs such as property taxes, insurance, utilities, and maintenance can increase over time. If your expenses have risen, you can explain to tenants that a rent increase is necessary to cover these higher costs and continue providing a well-maintained living environment.
3. Current Market Value
The rental market in Ontario is experiencing significant growth, driving up the rental market value of properties across the province. As demand for rental units continues to rise, landlords can benefit from staying informed about current rental rates. It’s advisable for landlords to consult with real estate professionals who can assess their property’s rental value.
If landlords are receiving below-market rent, we recommend utilising rent collection management services to adjust the rent to current market values for a reasonable increase.
If you’re a landlord who requires support with maximizing your rental income, reach out to us today and we will be happy to assist.
