A lot of Sandy Hill’s big old houses aren’t single-family homes anymore. Over the decades many were divided into two, three or more apartments, largely because of demand from University of Ottawa students. For buyers, that creates an opportunity: a house where the rent from one or two units helps carry the mortgage. It also comes with homework.
Are the units legal?
This is the first question. A legal unit has the right permits and meets the Ontario Building Code and Fire Code, including fire separations between units and proper exits. An apartment that was added without permits can be expensive to bring up to code, can cause insurance problems, and can be a headache when you sell. Ask the seller for permits, and have your lawyer and inspector look closely.
Tenants come with the house
In Ontario, when you buy a property with tenants, their leases carry over to you. If you want to move into a unit yourself or have a family member move in, there’s a formal process under the Residential Tenancies Act, with notice periods and compensation. You can’t simply ask the tenants to leave on closing day. Find out who the tenants are, what they pay and how long they’ve been there.
Rent control depends on the unit
Most older rental units in Ontario are covered by rent control, which limits yearly increases. Units first occupied as a residence after November 15, 2018 are generally exempt. Know which category each unit falls into before you count on future rent increases.
Student rentals have their own rhythm
Student demand near uOttawa is steady, but it runs on the school year. Many leases start in September, and turnover is higher than with long-term tenants. Budget for some wear and tear.
Living in one unit yourself
Plenty of Sandy Hill buyers live in the main unit and rent the rest. It’s a good way into an expensive neighbourhood, as long as you’re comfortable being a landlord.
If you’re looking at an income property in Sandy Hill, let’s talk. I’d strongly suggest involving a real estate lawyer early too.
Sources: Government of Ontario: Renting in Ontario and the Landlord and Tenant Board. This post is general information, not legal advice.
Photo by SimonP, licensed under CC BY-SA 3.0, via Wikimedia Commons.