Tuesday Oct 11th, 2016
A recent report found that one in every 20 Canadian households owns at least one income property, citing that the stability of income afforded by rental investment is a strong motivator compared to other asset classes.
“A lot of people are getting into the market and buying rental properties because they love the fact that it’s a fixed asset,” said Shawn Maher, an investor and owner at GS Maher Property Holdings. “They can actually see it and they don’t have to worry about it melting away.”
On average, landlords were able to obtain rent increases of around 1.60% in 2015 and is expected to be around 2.00% in 2016.
Interest among large investors in buying rental buildings in the major markets has been increasing in the past two years – in particular in Calgary, Edmonton and Ottawa.
Meanwhile, smaller rental investors, which accounts for households that own one or a few units, or renting out flats or basement apartments, also play an important role in Canada’s housing market.
According to the report, the incidence of owning at least one rental unit is slightly higher in the under-50 age groups. Income, however, is a more important factor than age.
“A lot of people get in at the wrong time when it comes to real estate cycles,” added Maher.
“Investors need to make sure that those rental properties have a positive cash flow or else they have to wait until the market corrects and then come in and buy it.”
Another aspect to Rental property is secondary dwelling units, ie. having a secondary dwelling set up within the primary residence. In short, basement apartments. Second units — also known as accessory or basement apartments, secondary suites/units, two-unit housing, “granny flats” and in-law flats — are self-contained residential units with kitchen and bathroom facilities within dwellings or within structures accessory to dwellings. Please read on to learn about the new policies being set up by the City of Brampton:
Notice on Second Units
- Only one second unit is permitted per house.
- In a bungalow, the second unit can be up to 75 per cent of the primary unit’s gross floor area (GFA). For all other houses, the second unit can be up to 45 per cent of the primary unit’s GFA.
- There must be one parking space for the second unit, in addition to the required parking for the primary unit.
- 1.2 metres side yard setback for a side door access to a second unit.
Second units offer Brampton residents another option for safe, affordable housing, but in order to be legal, they must be registered with the City of Brampton.
Before registration is approved, units must be inspected by the City to ensure they comply with the Ontario Building Code and/or Fire Code; approval from the Electrical Safety Authority is also required. Units must also meet all Zoning and Property Standards regulations.
Homeowners who do not register their second unit with the City may be subject to a fine of up to $25,000 for individuals or $50,000 for a corporation.
To get all the details and see the frequently asked questions, please go here