Maximizing Your Earnings as an Ontario Landlord
With Ontario real estate prices skyrocketing, it might seem that keeping your property rented is all it takes to profit. But beyond rising rents and property values, there are strategic ways to maximize your earnings. Here’s how to make your journey as a landlord not only fulfilling but also highly profitable.
1. Conduct Thorough Market Research
Before buying a rental property, assess the local rental market. Whether investing in a multi-unit building or renting out a spare room, consider neighborhood vacancy rates, nearby amenities, and the types of properties most appealing to renters. Proximity to public transit, grocery stores, and entertainment venues can boost demand for your property and reduce vacancy rates.
2. Minimize Vacancies by Adding Value
Vacancies are costly. To attract and retain high-quality tenants, consider offering perks that add value, like complimentary Wi-Fi or an included parking spot—a particularly attractive option in cities like Toronto, where parking is at a premium. Satisfied tenants are more likely to stay, minimizing turnover and vacancy costs.
3. Maintain Contact with Interested Renters
If your property has unique features (like an unconventional layout) that might turn renters away, keep a list of everyone who has shown interest. Reach out to these potential tenants if you make improvements or adjust the price. You can also upload a video tour of the property to highlight unique features and appeal to specific renter types, such as describing a sloped attic as an ideal home office or creative space.
4. Compare Rents with Local Listings
Stay competitive by evaluating similar listings when a tenant gives notice. Neighborhoods change, and so do rental rates. If you’ve made upgrades or the area has seen growth, you may find it worthwhile to adjust your rent accordingly. Charging a competitive rent helps you retain and attract tenants while maximizing cash flow.
5. DIY Minor Repairs to Save Costs
Learn basic maintenance skills to handle minor repairs yourself. If you do hire professionals, inquire about preferred rates for landlords, especially if you can promise steady business. Keeping maintenance costs low directly improves your bottom line.
6. Deduct Rental Expenses
As a landlord, the CRA allows you to deduct many rental-related expenses, from property advertising to utilities and insurance. Be sure to claim all eligible deductions to reduce your tax burden, putting more money back into your rental business.
7. Renovate and Look for Energy Efficiency Subsidies
Investing in renovations might seem costly, but targeted improvements often pay off. Focus on high-return areas like kitchens and bathrooms to increase property value and attract higher rents. Additionally, Ontario offers tax incentives and subsidies for energy-efficient upgrades, helping you recover some of the renovation costs.
8. Refresh Instead of Replacing
A thorough cleaning can often refresh a unit without the need for expensive renovations. For example, scuff marks can often be removed with a Magic Eraser, and carpets can be steam cleaned for a fraction of the cost of replacement. Tenants appreciate a clean, move-in-ready space, and you’ll save on unnecessary expenses.
Don’t Forget Landlord Insurance
While optimizing your rental income is essential, protecting your investment with proper insurance is equally important. Contact us to discuss landlord insurance options and ensure you have the best coverage at competitive rates, giving you peace of mind while maximizing profits.