How to Start Renting Out Property in Ontario: A Beginner's Guide

Step 1: Understand the Legal Framework

Before you list a single ad, you need to understand the laws that govern landlord-tenant relationships in Ontario. The big one is the Residential Tenancies Act (RTA). It covers everything from how much you can charge for rent to how you can (and can't) evict a tenant.

Key things the RTA controls:

• Rent increases: Limited to the annual guideline percentage (unless your unit is exempt)
• Evictions: Must follow a specific legal process through the Landlord and Tenant Board (LTB)
• Deposits: Only a last month's rent deposit is allowed. No damage deposits.
• Maintenance: You must keep the unit in a good state of repair
• Privacy: 24 hours written notice before entering the unit (with exceptions)

Don't assume the rules are the same as other provinces or the U.S. Ontario has some of the strongest tenant protections in North America.

Are You Exempt from the RTA?

Some rental situations aren't covered by the RTA:

• You share a kitchen or bathroom with the tenant (this is a roommate situation)
• The unit is in a building first occupied after November 15, 2018 (rent control doesn't apply, but most other RTA rules do)
• Seasonal or temporary accommodations

Step 2: Prepare Your Property

Your property needs to meet certain standards before anyone moves in.

Legal Requirements

1. Building permits: If you've converted a space (like a basement) into a rental unit, you need proper permits and inspections
2. Fire code compliance: Working smoke detectors on every level, carbon monoxide detectors near sleeping areas, proper egress windows in bedrooms
3. Electrical safety: Up to code, no knob-and-tube issues
4. Property standards: Meet your municipality's minimum property standards bylaws
5. Insurance: Switch to a landlord insurance policy. Your regular homeowner's insurance won't cover rental situations.

Making It Rent-Ready

• Deep clean everything
• Paint walls in a neutral colour
• Fix anything that's broken, no matter how small
• Ensure all appliances work properly
• Change the locks between tenants
• Take photos of the entire unit for your records

Step 3: Set the Right Rent

Pricing your rental correctly is critical. Too high and it sits vacant. Too low and you leave money on the table.

How to Research Market Rent

1. Check comparable listings on sites like Kijiji, Facebook Marketplace, Rentals.ca, and Realtor.ca
2. Filter for similar units: same area, same size, similar condition
3. Factor in what's included: utilities, parking, laundry, appliances
4. Consider the season: Spring and summer see higher demand and better pricing in most Ontario markets

Remember: once you set the rent and a tenant moves in, you can only increase it by the annual guideline amount (unless your unit is exempt from rent control). So get the initial price right.

Step 4: Find Quality Tenants

Your tenant selection process is the most important decision you'll make as a landlord. A great tenant pays on time, takes care of the unit, and communicates well. A bad tenant can cost you thousands.

Advertising Your Unit

• Take high-quality photos (natural lighting, wide angles, clean spaces)
• Write a clear, honest listing with all the important details
• Post on multiple platforms: Kijiji, Facebook Marketplace, Rentals.ca, Zumper
• Include: rent amount, what's included, number of bedrooms/bathrooms, available date, pet policy (remember, you can't enforce a no-pet clause under the RTA)

Screening Tenants

You're allowed to screen tenants, and you should. Collect:

1. A rental application with employment info, references, and consent for a credit check
2. Credit report (with the applicant's written consent)
3. Employment verification: letter from employer or recent pay stubs
4. References from previous landlords (call them, don't just read the letters)
5. Government-issued ID

You cannot discriminate based on race, gender, family status, disability, age, or other protected grounds under the Ontario Human Rights Code. This includes refusing to rent to families with children or people receiving social assistance.

Step 5: Use the Ontario Standard Lease

You must use Form 2229E, the Ontario Standard Lease, for most residential tenancies. Download the latest version from the Ontario government website.

Key sections to fill out carefully:

• Names of all tenants
• Rent amount and what's included
• Term (fixed-term or month-to-month)
• Rent deposit details
• Any additional terms (must comply with the RTA)

Don't add illegal clauses like no-pet rules, damage deposits, or clauses that waive the tenant's RTA rights. They're void even if the tenant signs them.

Step 6: Handle the Move-In Process

1. Collect the last month's rent deposit (equal to one month's rent)
2. Provide the signed lease within 21 days
3. Complete a move-in inspection with the tenant present
4. Take photos and video of the entire unit
5. Hand over keys and document how many were provided
6. Show the tenant where the breaker panel, water shut-off, and furnace filter are located
7. Provide emergency contact information

Step 7: Set Up Your Management System

Even with one unit, you need a system. Things to track:

• Rent payments: When they're due, when they're received
• Maintenance requests: What was reported, when, and how it was resolved
• Documents: Leases, inspection reports, notices, receipts
• Finances: Income, expenses, taxes

A spreadsheet works at first, but it gets messy fast. BricksAbove is built specifically for Ontario landlords, helping you track rent, manage maintenance, store documents, and stay organized from day one. It's worth setting up properly from the start rather than scrambling to organize later.

Step 8: Know Your Tax Obligations

Rental income is taxable. You'll need to report it on your annual tax return. But you can also deduct many expenses:

• Mortgage interest (not principal)
• Property taxes
• Insurance premiums
• Repairs and maintenance
• Property management fees
• Advertising costs
• Utilities (if you pay them)
• Professional fees (accountant, legal)

Keep detailed records of all expenses. Consider working with an accountant who has experience with rental properties. The deductions can significantly reduce your tax burden.

Before committing to a purchase, run the numbers with our free mortgage calculator to understand your monthly payment obligations. Then use the cash flow calculator to see whether the rental income will cover your costs and leave room for profit.

Common Beginner Mistakes

• Not screening tenants properly because you're eager to fill the unit
• Using a custom lease instead of the Standard Lease
• Collecting a damage deposit (illegal in Ontario)
• Not documenting the unit's condition at move-in
• Ignoring maintenance requests until they become expensive emergencies
• Not understanding eviction rules and trying to remove a tenant improperly

Being a landlord in Ontario isn't difficult, but it does require knowledge and organization. Start with the right foundation, and you'll be set for long-term success. Sign up for BricksAbove to manage your rental the smart way from the beginning.