Ontario publishes next year's rent increase guideline

Ontario confirmed its annual guideline for rent increases on most tenancies that began before November 15, 2018, and on all covered units for sitting tenants.

Our take: The guideline caps your revenue growth on sitting tenants — but units first occupied after November 2018 are exempt, and turnover resets to market. The spread between in-place and market rent is the real asset you are buying in Ontario.

In your underwriting: Model two rent tracks: guideline-capped for sitting tenants, market on turnover. A building full of long-term tenants at deep discounts is a duration bet, not a cash-flow deal.

Developers: post-2018 purpose-built exemption keeps new construction pro formas guideline-free in Ontario.

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