A couple of months ago, I went into real estate investing and became a landlord. The good news is, a good friend rented this place. The bad news the rent was so low that my cash flow is negative every month. I was planning to increase the rent (more than the alloted 7 percent) in order to make the rent more standard and bring myself back to positive cash flow. Can I legally do this? Or do I have to follow the govt rental standards and be doomed with a negative cashflow until the tenant vacates the premise? Note Im planning to make an increase of more than 7 percent at the end of first year lease. Again, is this legal?
Rent being too little. Can you increase it?
- Thread starter ottawaman
- Start date
Depends on the location. Sounds like you`re in Ontario, where I believe the answer is no, unless you apply for an exception.
QUOTE (ottawaman @ Jul 6 2010, 08:08 PM) A couple of months ago, I went into real estate investing and became a landlord. The good news is, a good friend rented this place. The bad news the rent was so low that my cash flow is negative every month. I was planning to increase the rent (more than the alloted 7 percent) in order to make the rent more standard and bring myself back to positive cash flow. Can I legally do this? Or do I have to follow the govt rental standards and be doomed with a negative cashflow until the tenant vacates the premise? Note Im planning to make an increase of more than 7 percent at the end of first year lease. Again, is this legal?
Unfortunately the 2011 guideline for rent increase in Ontario is only 0.7 per cent. That`s less than 1%. The notice of increase must be given in writing 90 days in advance. First increase could be given at the end of the one year lease.
Unfortunately the 2011 guideline for rent increase in Ontario is only 0.7 per cent. That`s less than 1%. The notice of increase must be given in writing 90 days in advance. First increase could be given at the end of the one year lease.
QUOTE (ottawaman @ Jul 6 2010, 05:08 PM)
.. more than 7 percent at the end of first year lease. Again, is this legal?
what province ? Who allows 7 percent ?
Know the local landlord-tenant act.
THIS IS A BUSINESS. KNOW THE RULES.
You don't have to love the rules .. but you have to play by them.
related post/question: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-17310-Rent_increases_for_renovations.html
.. more than 7 percent at the end of first year lease. Again, is this legal?
what province ? Who allows 7 percent ?
Know the local landlord-tenant act.
THIS IS A BUSINESS. KNOW THE RULES.
You don't have to love the rules .. but you have to play by them.
related post/question: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-17310-Rent_increases_for_renovations.html
QUOTE (ThomasBeyer @ Jul 6 2010, 11:51 PM) .. more than 7 percent at the end of first year lease. Again, is this legal?
what province ? Who allows 7 percent ?
Know the local landlord-tenant act.
THIS IS A BUSINESS. KNOW THE RULES.
You don`t have to love the rules .. but you have to play by them.
http://news.ontario.ca/mah/en/2010/06/2011...-guideline.html
Yup, that`s a whole 0.7% for 2011 in Ontario. 7/10th`s of 1%.
what province ? Who allows 7 percent ?
Know the local landlord-tenant act.
THIS IS A BUSINESS. KNOW THE RULES.
You don`t have to love the rules .. but you have to play by them.
http://news.ontario.ca/mah/en/2010/06/2011...-guideline.html
Yup, that`s a whole 0.7% for 2011 in Ontario. 7/10th`s of 1%.
QUOTE (JohnBeddome @ Jul 6 2010, 09:59 PM) http://news.ontario.ca/mah/en/2010/06/2011...-guideline.html
Yup, that`s a whole 0.7% for 2011 in Ontario. 7/10th`s of 1%.
Yikes.....
Yup, that`s a whole 0.7% for 2011 in Ontario. 7/10th`s of 1%.
Yikes.....
QUOTE (DaveRhydderch @ Jul 7 2010, 05:51 AM) Yikes.....That is one reason why CAP rates are generally lower in the Western provinces as you can raise rents more quickly.
Thus, in Ontario you must have great cash-flow right out of the gate as you cannot raise rents, thus the price per rent $ collected is generally lower than in the west !
In other words, socialism, as (potential) value gains by landlords are reduced by the government and shifted to (existing) tenants .. forcing new tenants to pay more !
Thus, in Ontario you must have great cash-flow right out of the gate as you cannot raise rents, thus the price per rent $ collected is generally lower than in the west !
In other words, socialism, as (potential) value gains by landlords are reduced by the government and shifted to (existing) tenants .. forcing new tenants to pay more !
If he is actually getting a great deal he will definitely let you know he knows his rights very quickly and chances are you will not remain friends for much longer.
Legally if you want to get the rent up you need a new tenant otherwise you are asking for trouble.
In the future never rent to friends or relatives, makes doing business more difficult having to evict either.
Legally if you want to get the rent up you need a new tenant otherwise you are asking for trouble.
In the future never rent to friends or relatives, makes doing business more difficult having to evict either.