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Income Property

Canada’s big banks have all cut their prime lending rates following the announcement that the central bank had lowered its benchmark interest rate to 0.5 per cent.

It was the second time this year the Bank of Canada had dropped the rate to stimulate the economy, after holding the rate steady for about four years.

The bank is now forecasting a rebound later in the year, but a small one: 1.1 per cent growth in GDP for all of 2015. As recently as April, the bank was expecting 1.9 per cent growth this year.

What is this mean for home buyer? More chances to qualify for mortgage financing.

For Home Investors:

Thinking of paying off your mortgage in 10 years? Perhaps paying for your children education in full? Or maybe building for additional wealth for retirement?

The answer to this questions may be: BUY AN INVESTMENT PROPERTY

Let us show you how you can take advantage of the equity of your home to acquire an investment property without having to change your finances.

Contact Us For More Information “How To Acquire A Secondary Investment Property” using your home equity.


If you are a landlord in Ontario or becoming to be one this topic may be beneficial to you.

One of the most interesting and controversial topic for landlord tenant is the process of selecting applicant and understanding your rights as a “landlord” and most importantly understanding the “tenants” rights that you don’t cross the Human Rights Tribunal of Ontario.

In Ontario if you are a landlord of a residential property you may not have the same liberty of rights as a commercial property landlord. Simply put if you are a landlord of a commercial property you are the “LORD” and can impose more rights whereas in the residential property the tenant is most of the time the “LORD.”

Age discrimination is a big No! No! in residential tenancy. In Ontario you cannot deny a tenant base on their age, gender, sexual orientation or even as far as you cannot deny them for having pets.

Under Ontario law 16 or 17 years old can sign a lease and although a landlord can exercise their rights to have option lawfully how it is communicated can make a huge difference that you don’t poke The Human Rights Tribunal of Ontario.

As an example article from the The Star dated Wednesday August 27, 2014 fined a landlord $10,000 for discriminating an under age applicant. To read more of this story on The Star newspaper click here. 

Base on the article above basically the landlord can exercise his rights to have option when selecting an applicant and he is entitled to that but the fact that he mentioned “the building had a policy of not renting to anyone under 18” automatically became a discrimination case. Had the landlord said he pursued another applicant he would have not been the subject of discrimination.

Another example, a young lady rented an apartment with the lease under her. Soon thereafter she invited her wheel chaired mother to stayed with her and demanded the landlord to make the entrance wheel chair friendly which the landlord refused because of the costs. The young lady apparently know her rights and set him up for a trap and after sometime of her bothering him going back and forth via email to make the renovation the landlord became so annoyed and arrogantly emailed her back with the statement “just to let you know this building is meant for normal people not handicap!” That statement alone is enough to throw away to exercise his rights to have an option and he became an easy target for The Human Rights Tribunal of Ontario and which he was fined $10,000.

So lesson for landlords be careful how you communicate your statement across with tenants that you don’t cross the boundary of human rights and residential tenancy act and always treat your business with respect and dignity.

Rent To Own How Does It work?

How Does Lease To Own Work?

  • These agreements – relatively uncommon in Canada – are best administered by a licensed real estate agent or lawyer, property experts say.
  • A lease-to-own agreement gives a buyer the opportunity to rent a home, with an option to buy in three years or less. The sale price is determined beforehand.
  • The potential buyer pays a deposit, which is credited toward the purchase price.
  • The buyer pays a monthly rent, just as would be done in a typical lease agreement, plus an additional rent premium that is also credited to the purchase price.
  • If the potential buyer doesn’t buy the house at the end of the contract, both the deposit and the rent premium are lost.
  • Real estate agents and lawyers agree that before entering into such agreements, potential buyers should ensure they are dealing with the property owner.
  • They should seek assurances that their option deposits are going into a trust or other secure place.
  • Potential buyers should also know and understand the potential risk of losing their option deposit should they never qualify for a mortgage to eventually purchase the home.

Who really benefits?

Lease to own usually works very well if done correctly. Most of the time it works in favours to the landlord or homeowner. Why? Because they target buyers – people whose willing to own a home but cannot get a mortgage from the bank. (Example: Buyers that don’t have enough income and think their income stream will increase in the future or do not have a great credit score to qualify for a mortgage and thinking their credit score will increase in the future.) Some preyed on buyers who they think cannot afford to buy a home at all and they would inflate the future selling price of the property. Unless you have a crystal ball and could accurately predict the economic situation in the future then you can be certain that you are getting a good deal.

There are a lot of companies who advertise seminars about lease to own business and how it is a great source of rental income. But don’t get fooled with their no risk-guarantee advertisement and make sure to consult a professional before venturing and getting into a lease to own property investment yourself. Renting out a property to somebody who is in financial difficulty and cannot afford to buy now – with a tainted credit score is very risky! If you are counting on the rental payment to pay for a mortgage you could be well out-of-pocket for a few months while evicting a tenant out of your rental premises.

Before deciding whether lease to own is the right option for you consider and ask yourself the following questions:

1. Am I certain and absolutely sure that my financial situation will change for the better in the upcoming years?

(This question is important because you wouldn’t want to get locked in to a lease agreement where you would be shouldering all the expenses mentioned in the lease agreement such as – maintenance of the property and would later found out you are not qualified to get a mortgage anyway!)

2. Do I really know the future market value of the property Im purchasing?

(Do your homework! Do you think the future market value is set a proper price? Even an expert appraiser will be reluctant to give a future valuation because it is impossible to predict what will happen in the future. Make sure you ask a question about how they arrived at the future market value – what valuation method of analysis was used to arrive at a dollar value.)

3. For Lease To Own Investor: Do I have enough funds to pay months of mortgage without receiving a rent?

(You need to consider for the worse scenario. Under RTA – Residential Tenancy Act a landlord must follow a proper eviction process to evict a tenant. Sometimes eviction process could take months and months and if you are relying solely out of a rental income you may find yourself defaulting on your mortgage.)

Renting a bedroom vs Entire HousePassive income. The easiest way to create passive form of income is through renting out a property whether an entire house or a spare bedroom. What is passive income? Simply define by Robert Kiyosaki, the author of rich dad poor dad, an income stream that is generated with little or no effort. It is called passive because it is effortless also known as “dumb” income that does not involve a lot of strategy compare to other forms of income generating sources.

Home owner rent out a spare bedroom for different reason. Whether your budget is stretched thin or you’re looking for a way to get ahead, renting out that extra bedroom can provide a financial boost. Add breathing room to your monthly budget. With less of your monthly income going toward mortgage payments, you can focus on other priorities like adding to your emergency savings or retirement account or paying off credit card debt.

A savvy real estate investor on the other hand would acquire multiple properties to produce multiple income stream which requires more cash flow and involves higher risk compare to a simple homeowner renting out just a spare bedroom. Renting out an entire unit is different from just renting out a spare bedroom because they fall in to two different property law in Ontario.

This is when an investor needs to be careful and make sure he has a good understanding of tenancy law in the province of Ontario under Residential Tenancy Act.

So you have decided to rent out an extra bedroom space in your primary residence. The good news is under hotel accommodation where a landlord (owner of the house) resides in the same premisses, an entrance is shared including amenities such as kitchen and bathroom such tenancy is excluded from residential tenancy act under hotel accommodation. Therefore a landlord or the owner of the house that lives under the same roof can impose his own rules as long as it does not violate the quiet enjoyment of his border.

On the other hand when renting out an entire unit such as basement unit equipped with a separate entrance or renting out an entire house such tenancy falls in to the rules of Residential Tenancy Act. Under the act, a tenant must be given proper notice when terminating a tenancy agreement. For example a month to month tenancy requires a 60 days notice, a weekly tenancy requires a 28 days notice. Also, keep in mind the “no pet” clause in the province of Ontario which entails that a landlord cannot prohibit a tenant from bringing in pets in the house unless such pet can pose harm or causes allergic reaction to people living in the house.

Under lease agreement 60 days notice must be given to both party in advance prior to termination of tenancy. Question normally arise, what if a tenant failed to pay monthly rent obligation? Under RTA a tenant must be given a proper notice – whether the tenant is under a lease agreement or a month to month tenancy a notice must be given to both party. If a tenant still does not complies to a landlord demand for rent, a landlord must obtain an eviction notice from the sheriff office and this may take few days to receive. It could take up to 30 to 60 days before a tenant can be fully evicted out of the premisses.

Wether you are planning of renting out a whole unit or a spare bedroom it is also important to know the zoning bylaws within your area. Some areas in Toronto, ON. prohibits subletting a residential home so it is important to check with the municipality about your zoning bylaws.

There is also a difference between a legal apartment and illegal apartment so don’t get mixed up between the two. What constitute a legal apartment is a unit that is inspected and approved by the municipality and deem to be safe to live in. Such inspection includes checking of proper entrance and exit, windows, doors, electrical wiring, fixtures etc. It sometimes can be very expensive to upgrade a unit to a legal apartment and this is why almost 90% of home rental apartment in Toronto is an illegal apartment to begin with. Otherwise, there would a lot of people living in the street.

I am not suggesting that you start an illegal rental apartment but it is important for you to know the facts. Renting out a property can be very rewarding and can add to financial gain if done correctly.