The rent increase guideline is a ceiling, not a target
On a unit the guideline applies to, a landlord may raise the rent once every twelve months, on ninety days written notice using the prescribed form, and by no more than the guideline the province publishes for that calendar year. This app caps that guideline at 2.5% a year. The 2.5% is this build's own figure and carries no citation: the Act named below has not been read here, and nothing in this row reports the terms of any document. Anything above the guideline requires an above-guideline increase application to the Landlord and Tenant Board, which is available for capital expenditures, a municipal tax increase or added security services, and is decided rather than granted.
What it decides. The rent-growth assumption in any projection of a guideline unit is held at or below 2.5% a year, which is this build's own ceiling and not a figure read off anything. Nothing here reads the guideline the province published for any past year, so no history sits behind it either. A model that grows rent at 4% or 5% on such a unit is not optimistic, it is describing a different property.
Residential Tenancies Act, 2006, ss. 116, 119, 120, 126; O. Reg. 516/06
November 15 2018 is the date the guideline turns on
A rental unit in a building that was not occupied for any purpose before November 15 2018, and certain additions and conversions first occupied for residential purposes after that date, are exempt from the guideline. The rest of the tenancy is unchanged: the twelve month interval between increases and the ninety day notice on the prescribed form still apply, and the tenant can still dispute the increase at the Board.
What it decides. The test is the date the unit was first occupied, not the year the building was built and not the start of the current tenancy. On a new condominium the declarant is the party who knows that date and a listing rarely states it. Ask, and get the answer in writing, because it is the single fact that decides whether the income is a market figure or a controlled one.
O. Reg. 516/06, s. 6.1; Residential Tenancies Act, 2006, s. 120
Market rent arrives when the unit turns over, lawfully
Ontario controls the increase within a tenancy and not the rent charged to a new tenant, so a landlord and a new tenant may agree on any rent when the unit is genuinely vacant. Ending a tenancy to reach that rent is a different matter: notice for the landlord's own use, for a purchaser's own use or for major repairs each has its own grounds, its own compensation and its own remedies if it is given in bad faith, including an application by the former tenant within two years.
What it decides. The gap between an in-place rent and a market rent is not a plan. It is realised when the tenant leaves of their own accord, on their timetable, and underwriting it as though it arrives on closing is the most expensive mistake available on a tenanted purchase.
Residential Tenancies Act, 2006, ss. 48, 49, 55.1, 57, 113
A tenant who stops paying stops paying, and the mortgage does not
Non-payment starts with a notice giving the tenant fourteen days to pay, then an application to the Landlord and Tenant Board, then a hearing, then an order, then enforcement by the Court Enforcement Office, which is the only body that may remove a tenant. A landlord may not change the locks or remove possessions. The tenant may void the order at any point before it is enforced by paying the arrears and costs, after which the tenancy continues and the next default starts the process again. The Board's scheduling has run months behind its own service standards, which the Ontario Ombudsman investigated and reported on in 2023.
What it decides. Budget for the possibility of paying every carrying cost on this property with no rent arriving for several months, and treat the arrears as a debt you then have to collect rather than as income deferred. No ratio on this page survives that scenario, which is why none of them is a plan on its own.
Residential Tenancies Act, 2006, ss. 39, 59, 74; Ombudsman Ontario investigation into the Landlord and Tenant Board, 2023
The maintenance reserve stops being a recommendation
A landlord must keep the unit and the complex in a good state of repair, fit for habitation, and in compliance with health, safety, housing and maintenance standards, whether or not the tenant was aware of the condition before moving in. The obligation cannot be contracted out of, a lease term that tries to is void, and a tenant can apply to the Board for an order including a rent abatement and an order requiring the work to be done.
What it decides. On the cost statement below, the maintenance set-aside is described as a recommendation rather than a bill, which is true of a house you live in. On a tenanted unit it is the cost of a statutory duty enforceable by the tenant, so it is not a line to trim to make the arithmetic work. A furnace that fails in January is an emergency repair with a deadline set by somebody else.
Residential Tenancies Act, 2006, ss. 4, 20, 22, 29, 30
Buying tenanted means buying the tenancy
A tenancy runs with the unit. The purchaser becomes the landlord on closing, bound by the existing lease, the existing rent and the existing rent history. A purchaser who requires the unit for their own residential occupation or that of immediate family can have the seller give notice for a purchaser's own use: sixty days ending on the last day of a rental period, one month of rent as compensation, an undertaking that the purchaser will occupy for at least a year, and no guarantee the tenant leaves on the date. If they do not, it is an application to the Board and then the Sheriff.
What it decides. Vacant possession on closing is not something a seller can promise with certainty on a tenanted unit, whatever the agreement says. The closing date and the end of the tenancy are two separate timetables, and only one of them is under anyone's control. If you intend to live there, resolve this before the deposit, not after.
Residential Tenancies Act, 2006, ss. 18, 48, 49, 55.1, 57, 72
A property nobody lives in needs 20% down
Mortgage insurance is understood here to be available only where the borrower or an immediate family member occupies one of the units, so this app treats a purely tenanted purchase as uninsurable. That understanding is not a reading of anything: the insurers' occupancy requirements have not been read here, and no rate sheet has been seen here either. Without insurance the loan is conventional, which this app prices at 20% down. The 20% is this build's own figure and carries no citation. Whether a rental is priced above an owner-occupied mortgage, and by how much, is not something this build holds a figure for at all.
What it decides. The down payment control on the cost pages goes down to a 5% floor, because those pages are built for somebody who will live there. That 5% and this 20% are both this build's own figures. On a rental the floor here is 20%, and every figure computed below a 20% down payment describes a mortgage no lender in this country will write.
National Housing Act; CMHC, Sagen and Canada Guaranty owner-occupancy requirements
The lender counts the rent differently than you do
Lenders do not credit gross rent. Depending on the lender and the insurer it is either added back at a discount or offset against the property's own costs at some fraction, some require a signed lease and filed statements before they will count it at all, and some apply a debt service coverage floor on the property itself. This build holds no figure for any of those. No lender's or mortgage insurer's rental income policy has been read here, so a fraction printed on this page would be an invention. Ask for the fraction rather than assume one.
What it decides. A property that carries itself on this page can still fail the lender's own arithmetic, because their vacancy and expense assumptions are theirs rather than these. Get the treatment confirmed by the specific lender before the financing condition, since the answer differs between two lenders looking at the same lease.
OSFI Guideline B-20; lender and mortgage insurer rental income policies
Turning a home you live in into a rental is a taxable event
Changing a property from a principal residence to an income-producing one is a deemed disposition at fair market value on the date of the change, which can crystallize a capital gain even though nothing was sold and no money changed hands. An election is available in some circumstances to defer that treatment, with its own conditions and its own consequences for the principal residence exemption. Rental income is taxable in the year it is earned, and the interest portion of the mortgage is generally deductible against it while the principal portion is not.
What it decides. Every figure on this page is before income tax, and the tax treatment is not a rounding difference on a property you have lived in. This is the point at which an accountant is cheaper than the alternative.
Income Tax Act (Canada), ss. 45(1), 45(2), 54
These are the rules as they stand, with the section that creates each one, so they can be checked. They are not legal advice and they are not a substitute for reading the lease, the agreement of purchase and sale, or having a lawyer read either. A tenancy is the one part of a purchase where the standard form and the statute disagree often enough that the statute is the only thing worth planning around.