What challenges do landlords face in Toronto's rental market?

Toronto's rental market is one of the most rapidly moving and highly challenging environments for any landlord in all of Canada. It comes with many challenges landlords face in ensuring that their rental properties continue to run successfully, given the current situation with different regulations, financial pressure, and shifting tenant expectations. At Royal York Property Management, we oversee a $10.1 billion portfolio comprising over 22,000 properties. It is through this wide range of experience that we have been able to gain unique insights into the problems that landlords have to face and overcome. The following blog will discuss some of the key challenges that are faced by the Toronto landlords in the rental market and will provide updated insights for 2024.

Regulatory and Legal Challenges

Among the most significant challenges that landlords face is navigating the complex regulatory and legal framework. Indeed, the rental market in Toronto is very stringent in controlling rent and specifying precisely how much a landlord may increase the rent each year. For 2024, that will be 2.5 percent, which also affects profitability due to ever-increasing maintenance and property taxes. Additionally, landlords have to comply with the municipal by-laws and building codes, which differ for different neighbourhoods and property types. Ensuring compliance with these regulations requires meticulous attention to detail and staying updated on any changes.

Another vital area is knowledge about the rights of the tenant or obligations of a landlord. There are certain regulations under the Residential Tenancies Act that safeguard the tenants from exploitation, which include the right to a safe environment habitable for living, their privacy rights, and the procedure of eviction. Non-compliance with the rules could lead to litigation, which often involves financial penalties. As professionals in the field, we at Royal York Property Management take great care in maintaining all of the properties under our management up to these legal requirements, reducing risks for landlords.

Financial Hurdles

Accounting for rental properties can be quite challenging in Toronto. Toronto property taxes have been increasing steadily, which has added to the financial load that landlords have to bear. On top of this, the cost of maintenance is ever-increasing, especially with older properties that normally require more frequent repairs and updates. Effective financial management is essential for ensuring that the business stays profitable and sustainable.