A growing number of small, independent Canadian landlords are taking their properties off the rental market, according to new research from property-tech firm SingleKey. Driven by problematic tenants, defaults on payments, and a slow, protracted eviction process, dissatisfied rental housing providers are leaving the rental market in favour of alternative property income solutions like Airbnb.
“We’re already seeing pressure on the market with rental fees skyrocketing across the country, and now we’re increasingly seeing landlords shy away from long-term rentals rather than absorb the risks associated with a bad tenant,” said Viler Lika, CEO and founder of SingleKey. “Additionally, with interest rates rising rapidly to combat inflation, many would-be buyers are being priced out of the market, forcing them to rent rather than buy, meaning demand for rental units is only going to escalate at the same time that inventory is waning.”
SingleKey surveyed 200 Canadian landlords in the first week of July and found that 29 per cent have opted to leave their units vacant rather than risk being stuck with a bad tenant. Twenty seven per cent indicated they’d had experience with tenants defaulting on their rent. Meanwhile, two thirds (66 per cent) said they would rather list their units on Airbnb despite the additional work involved if it meant “not being saddled with a delinquent tenant.”
“The issue is that the eviction process in many jurisdictions is extremely protracted and complex, causing significant delays for landlords with valid justification for evicting a tenant,” said Lika. “There are mandatory waiting periods before the process can even start, months of income lost while navigating the legal process, plus additional court and sheriff fees. Ultimately it costs between $6,000 and $8,000 on average to evict a tenant, and in Ontario that cost can be double.”
The upside is that bad tenants are not the majority. According to the survey, 63 per cent of landlords are very happy with their tenants. For the remaining 37 per cent, SingleKey offers a free eviction calculator to help landlords determine what to expect in case of an eviction, as well as background checks and rent collection services.
