Property Management in Ontario
Income property due diligence is more complex than owner-occupied home purchases. Additional layers of financial, legal, and physical verification are required to understand what you're actually buying.
Financial due diligence: verify actual rent rolls against lease documents. Request 12 months of bank statements showing rent deposits to confirm rents are being collected as stated. Unexplained gaps may indicate prior vacancy, arrears, or rent not being deposited.
Key Responsibilities and Best Practices
Expense verification: request actual operating expenses for the past two years — not a pro forma. Actual utility costs, maintenance history, insurance premiums, and property taxes tell you what the property actually costs to operate.
Tenancy review: review each lease, confirm current term status (fixed or month-to-month), verify there are no undisclosed modifications to lease terms, and confirm LMR deposit amounts held.
How D&D Property Management Helps
Deferred maintenance assessment: a qualified property inspector assesses physical condition; the deferred maintenance list translates directly to capital budget for the first years of ownership. Price negotiation should reflect identified deferred maintenance.
Environmental screening: Phase 1 ESA is standard practice for any commercial or industrial property. For residential properties with potential environmental history (older construction, unusual site history), Phase 1 is also prudent.
Zoning and use verification: confirm the property's current use is permitted under current zoning. Secondary suites that weren't permitted when installed may not comply with current standards. Unpermitted units create liability and financing challenges.
Title review: your lawyer reviews title for encumbrances, easements, restrictions, and any other interests that affect the property. Understand what rights are registered against title before closing.