Investing in real estate in Toronto can be a smart move, especially with the growing popularity of laneway suites. These cozy self-contained living spaces tucked behind houses offer a unique opportunity for homeowners to make extra income. If you’re considering building and renting out your laneway suite, here’s a step-by-step guide to help you navigate the process and make the most of your investment. We at Densecity specialize in building laneway suites and multi-family housing. What separates us from others is that we have a portfolio of real estate holdings of income properties that we have built and managed.
Understanding Laneway Suites: What They Are and Why They Matter
Laneway suites are like mini-houses at the back of other houses in Toronto. They’re usually one or two stories high as of right. It’s important to know that there are rules and regulations about the construction of these suites, so make sure you understand them. Also, remember that having a laneway suite can boost your property’s value and bring in extra cash.
Getting Ready to Rent
Build the laneway suite from your potential tenant’s perspective. Make things easy to access in the suite. In small spaces, creativity and functionality are essential. For finishes, use materials that look good and are durable. Once completed and closed building permits, you must determine what to lease the space for. The total cost of the build and seeing what has been leased in your neighbourhood recently will help you determine the monthly amount you wish to charge.
Now that your laneway suite is ready and has come up with a lease price, it’s time to let people know it’s available. You may choose to use a realtor to find the ideal tenant. The fee is usually one month’s rent plus HST. However, with many online platforms, it has become more accessible to advertise your space for rent directly to people looking for a place to call home. Create an ad with nice pictures and details about what makes your place unique. Use different online platforms to reach more people.
Finding Good Tenants
When people show interest in your laneway suite, choosing tenants wisely is crucial. Check their references and history as renters. It is essential to ask for a credit score, a letter of employment with recent pay stubs and the first and last month’s rent. You want someone who will take good care of your place. Toronto’s rental market is competitive, so take your time and pick the best fit. Be clear about what you expect from the tenant to avoid problems later.
Paperwork and Rules
Once you’ve found tenants, it’s time to sort out the paperwork. Make a detailed lease agreement that covers everything — rent, rules, and responsibilities of the tenant and landlord. know what rights a tenant has and your rights as a landlord in Ontario. Being informed and having everything in writing protects both you and your tenants.
Managing the money side of things is a big part of renting out your laneway suite. Set up a secure way for tenants to pay rent on time. The date rent is due agreed. You may agree to get a cash, cheque, money order or e-transfer for payment. Regarding cheques, know that you, as a landlord, can ask for post-dated cheques, but in Ontario, the tenant isn’t required to provide them. Stay on top of taxes and report your rental income at the end of the year. Keep all receipts you have acquired throughout the year, as any expenses you incur can be used to reduce your rental income and any tax liabilities you may have concerning your rental income.
Building a Positive Relationship
Communication is key to a happy landlord-tenant relationship. Respond to your tenants promptly and professionally. If issues come up, deal with them calmly and respectfully. In Toronto, where community matters, creating a friendly atmosphere in your laneway can improve everyone’s living experience. Being responsive and having a good relationship with your tenant will result in having the same tenant for a longer term.
Keep your investment safe by staying on top of maintenance. Regular check-ups and fixing things quickly help avoid more significant problems later on. Ensure everyone knows their responsibilities — what you’ll care for and what tenants should handle. This teamwork keeps your laneway in good shape. Plan for regular upkeep and repairs to keep your property in good shape
Knowing the Rules and Trends
Leasing in Toronto falls under the jurisdiction of the provincial government. Keep an eye on updates in local regulations that might affect your laneway suite. Knowing what’s happening in the rental market helps you stay competitive. If you ever feel unsure, seek advice from professionals who know Toronto’s real estate scene.
Renting out your laneway suite in Toronto is more than just a money move; it’s a chance to be part of the city’s evolving real estate story. By understanding your laneway, being well-prepared, and following these steps, you can make your investment profitable and a positive addition to Toronto’s housing scene. Remember, with attention to detail, good communication, and a friendly approach, your laneway venture can thrive in this dynamic city.