How to rent your first home as a newcomer in Canada

Listen to episode 3 of the Countdown to Canada podcast for tips on renting your first home as a newcomer.

When moving to Canada, finding a place to stay is a top action item for most newcomers. As with any international travel, newcomers typically book their initial stay prior to arrival. And the preferred choice is usually a temporary accommodation (such as a hotel, hostel, or an apartment, condo or house) for the initial days or weeks, sometimes it could even be a couple of months.

For more permanent, long-term accommodation, newcomers often choose to lease or rent their first home in Canada, instead of outright buying.

The time needed to be able to find a place can vary depending on the demand-supply and vacancy rate in the rental market of the Canadian city you are moving to. Due to reasons related to credit history and employment proof, many newcomers find it challenging to secure rental places in major cities like Toronto. On the other hand, it is relatively easier to find a place if you intend to live in the suburbs or mid- or small-sized cities.

In this article, we will provide guidance on all the norms, requirements, and processes involved in renting a place so that you can arrive informed and prepared to start the new chapter of your life in Canada with confidence. 

How to find your first rental in Canada as a newcomer

Step 1: Decide your approach to finding a rental – self-search versus realtor

There are two ways you can go about finding accommodation in Canada. You can:

1. Search on your own through various online and offline methods: You can explore sites like ViewIt and Condos.ca to get an idea of the rent in different neighbourhoods. To find better deals, use sites/apps like Craigslist, Kijiji, Zumper, and Padmapper. There are also some provincially popular options like Home Zone on Facebook (for Toronto and GTA listings) and Winnipeg Rental Network (for Winnipeg listings) that are worth visiting. Since all these sites are listing aggregators, they provide a forum for tenants to directly connect with landlords. 

Tip: If a listing seems too good to be true, it’s probably a scam. Do not make any payments until you verify the place in-person and sign appropriate paperwork.

2. Hire a realtor/real estate agent: There are many realtors and real estate agencies that can assist you in finding a place. Realtor.ca is a good place to get started to find one. Another option is to browse listings on sites like ViewIt and Condos.ca; each listing will usually have the name and contact information of the realtor to whom you can reach out.  

Each approach has its own advantages and disadvantages. Here are a few to consider:

Step 2: Identify the neighbourhood

After you finalize the Canadian province and city you would like to move to; the next step is to identify a neighbourhood where you would like to live. Some factors that you should consider while researching neighbourhoods are:

• Average cost of rentals in a specific neighbourhood 
• Commute time to core downtown/city centre or major business hubs
• Monthly travel costs
• Walk and transit scores
• Proximity to schools, your workplace, grocery stores, transportation, shopping malls, places of worship, etc.
• Parking
• Crime rates
• Noise levels

Tip: It’s worthwhile to find accommodation that’s located centrally, or closer to transit, rather than choosing a place that you anticipate will be closer to a (future) workplace. In recent times, more people have been working from home due to the pandemic and hence, you should thoroughly evaluate your preferences with respect to geographic location and square footage.

Step 3: Decide the type of accommodation

There are different types of accommodation you should be familiar with:

• Apartment: According to the Canada Housing and Mortgage Corporation (CHMC), apartments vary from walk-up units in low-rise buildings to units located in buildings with elevator access. Available amenities in apartment buildings can vary from a single onsite washer and dryer to full laundry rooms, common rooms, and fitness facilities. 
• Condominium (condo): Condos are units (similar to suites or a flat) in a high-rise apartment building. Condo residents usually have access to shared amenities such as a gym, swimming pool, party room, etc. in the building.
• Rooming house: According to CMHC, rooming houses have rooms rented out to individuals. The kitchen, bathroom and living room is usually shared with other tenants.
• House: CMHC defines house rentals as townhouses, duplexes, semi-detached and single-detached houses. A house may have two or three separate apartments, one on top of another. A house divided into two units is called a duplex, while one that’s split in three is known as a triplex.
• Basement apartments: A basement apartment in a house is also often considered an apartment. Basement rentals provide more space than most apartments and provide the advantage of having access to some outside spaces including patios, lawns, gardens, and parking.
• Bachelor unit/studios: These can be found in apartments as well as condos. Bachelor units or studios are comparatively smaller, and a single room serves as both the bedroom and living area.

Step 4: Look for listings that meet your criteria

As you look for suitable accommodation, use filters online to narrow the options or if using a realtor, be sure to convey your preferences.

While shortlisting, here are some questions you may want to ask the landlord and/or realtor:

• Rent breakdown: Inquire about rent inclusions and exclusions. Utilities such as water, hydro (electricity), heating, air conditioning (AC), internet, and cable may or may not be included.  Parking space may cost you extra, too. Most units in Canada have a furnished kitchen with all main appliances included. But it’s a good idea to check if that isn’t the case.  
• Pets: If you own pets or intend to get one, check if the building has any restrictions on pets. 
• Guest policy: Depending on the type of accommodation, there may be rules and limitations to having guests over and abiding with “quiet hours.”  
• Interior decoration rules: Some landlords may not allow permanent changes to the property. Personalizing your space by hanging pictures or wall art, installing technology on a wall, etc. may be allowed but it’s always good to confirm.
• Lease duration: Not every rental unit will have a year-long lease; some landlords may want you to commit to a shorter or longer lease.
• Move-in date: Units or apartments are typically listed for rent two months before the move-in date (for instance, an apartment advertised on August 1 becomes available October 1). Also, most rentals begin on the first of the month. However, there are always exceptions so it’s a good idea to check with the realtor and/or landlord in advance.
• Acceptable payment methods for the rent: Ask the landlord if they accept all methods (cash, cheques, e-transfer, bank transfer, etc.) or if a certain type of payment is preferred.

Tip: When you visit a potential accommodation, take pictures to ensure you have a record of any damages or visible issues – this could be useful while negotiating the rent with the landlord.

Budgeting for rent in Canada:

Rent can differ based on a number of factors such as the neighbourhood, size of the unit, demand-supply of rental units, amenities and utilities included, etc. A casual search on websites like ViewIt and Condos.ca, or apps like Zumper and Padmapper will give you a fair idea of what to expect.

AC and heat are a majority of the cost component, hydro averages to $50-80 CAD per month, while water can be about $20-40 CAD per month. Internet and cable TV, combined, will cost additional – upwards of $100 CAD per month. Depending on the type of accommodation, there may also be additional charges for garbage removal and waste management. 

Tips:

• For in-depth analysis and rental market trends in major towns and cities across Canada, you can refer to the latest rental market reports published by CMHC.
• Use Arrive’s Cost of Living Calculator for better planning and budgeting.
• Remember that your total spend per month on accommodation will be more than just the rent as you will have to factor in utility bills (hydro, heat, AC, internet, home phone, cable TV) and things like parking, insurance, and transit passes. So what may initially seem like an affordable unit, may actually turn out to be expensive.

To give you an idea of average rent in Canada, data published by CMHC in January, 2020, highlighted:
Average two-bedroom condo rent levels were highest in Toronto ($2,476 CAD), Vancouver ($2,045 CAD) and Hamilton ($1,896 CAD).

Step 5: Prepare essential documents

To be able to rent a place, you will have to provide certain documents to prove that you can pay the rent on time and can afford the space. Landlords may ask for:

• Employment letter with your salary details 
• Credit report
• References (from friends or family or previous landlords in Canada)
• Bank statements

Navigating through newcomer challenges:

• For newcomers who are yet to find employment, showing sufficient funds to cover more than a couple of months worth of rent or being able to provide a local guarantor or co-signer might help.  
• To make up for the absence of a credit report, you can consider providing a letter from your bank or bank statements that show you have sufficient funds to cover more than a couple of months worth of rent.

Obtaining a credit report:

It takes at least a few weeks to a month for newcomers to receive their first Canadian credit card and a few additional months of credit transactions to build a credit history. EQUIFAX and TransUnion are the two major credit rating organizations in Canada, and you can choose either one to get your credit report. However, EQUIFAX is the more popular option, and most landlords tend to ask for a credit report from EQUIFAX.

Step 6: Sign the lease agreement

A lease is a document that summarizes your relationship with the landlord. It outlines the rent you’ll pay and mentions the dates of your lease, along with other rules around pets and smoking, what happens at the end of your lease, etc.

Once you decide on the apartment, house, or condo you want to rent, you will be required to submit an application form to the landlord. If you are accepted as a tenant, your landlord will share the lease agreement for you to review and sign. Upon completion of these basic formalities, you will have to make all essential payments (depending on your province, it may include first and last month rent, security deposit, key deposit, pet deposit, etc.).

Tips:

• Your lease agreement is an important document and should be kept safely. You may need it for other administrative tasks such as applying for a driver’s license, getting provincial insurance, etc.
• Ensure you read the lease thoroughly and are aware of any additional addendums or schedules that may be added by the landlord. Even if you sign the lease with additional clauses, if those are beyond the ones outlined in the provincial Residential Tenancies Act, legally, you cannot be held responsible for it.

At this stage, some landlords may even require you to buy tenant insurance. Shop around and browse different providers to find one that works for you. Some newer agencies such as Square and Sonnet offer competitive rates.

Tip: If you are subletting from an existing tenant, be sure to have a record of all payments you make. If paying cash, get a receipt. Additionally, have the division of utility bills documented.

Once all the paperwork is submitted, and the payments are made, your landlord will hand over the keys to your new home.

Step 7: Set up transfer of any utilities

More often than not, you’ll be moving into a unit that someone has previously rented, and hence, some utilities like hydro may need to be transferred to your name from the past tenants or from the landlord. 

Tip: There are different hydro providers, so make sure you get the name right. Ask your landlord, realtor, and/or building management to confirm. The registration process for hydro transfer is online and typically takes a day until you receive confirmation; you don’t have to physically visit any place to get it done.

Step 8: Move in!

Once you’ve signed the lease, received the keys, and transferred the utilities, it’s time to move-in! Check with your landlord and/or building management for any additional paperwork you may have to fill out after moving in. 

Tip: Most condo and apartment buildings have specific dates and times when the service elevator is available. Ensure you book it in advance to move in your larger items and furniture.

Know your rights and obligations as a tenant in Canada

The list of tenant rights and obligations is fairly long and specific to each province/territory in Canada. Here are a few important ones for you to be aware of:

Rent increase guidelines:

Rules on rent increase vary by province/territory. In some provinces, the government sets a limit that’s subject to change every year. If landlords wish to increase more than the set limit, they need to get approval. Select provinces, such as Alberta, do not have a limit. Rent increases can only occur every twelve months, and landlords must notify their tenants before the change; the number of days for this notice varies by province.

Rent payment and duration of lease:

Each Canadian province has its own rules and guidelines on rent payment. For instance, in Ontario, you are required to pay the first and last month’s rent before you move in, and there is no security deposit involved. However, in some other provinces like Vancouver may be required to pay a security deposit equivalent to one month’s rent. 

In most provinces, leases are signed for a duration of one year, and after that (unless a new lease is signed), tenants are by default considered to be month-to-month – meaning that you don’t generally need to sign a new lease for the next year. If you intend to move out, the duration for a notice varies by province. So be sure to check the guidelines for the province you will be moving to. 

You may refer to our article series on tenant rights for specific information and guidance:

• Alberta
  
• British Columbia
  
• Ontario
• Quebec
  
• Saskatchewan
• Nova Scotia
• Nunavut
  
• Manitoba
  
• New Brunswick
  
• Newfoundland and Labrador
  
• Northwest Territories
• Prince Edward Island
  
• Yukon

Landlord visits:

Landlords are required to give you notice before entering your unit or apartment for any reason (ranging from housekeeping, renovations, or showing your space to potential tenants if you are moving out).

Moving to a new country, a new city, or a new province and finding a place to live can be challenging and overwhelming but with the right guidance, planning, research, and relevant resources, you will be well-equipped to find a place you can call “home.” 

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