If you are in the market for a condo rental, chances are you’ve been entangled in a Toronto bidding war free-for-all. Before you know it, you are licking your wounds, haphazardly applying to property after property, ready to wave your white flag. According to The Toronto Real Estate Board, condo ownership declined in the second quarter, cutting down the number of vacancies for the city’s growing demand. The untimely decline in property rentals, combined with a 5% growth in condominium rental rates, make for a cocktail of difficulties for anyone looking to sign a lease.
Competition: Great for landlords- Not so much for renters
Soaring real estate prices in the GTA means many landlords are looking to cash out while prices are up. This may be a time of actualized aspirations for sellers, but for tenants who are given 60 days to leave, securing a new residence in two months can be a struggle. Woefully, property seekers with the dark cloud of “60 days’ notice” hanging over their heads are only a drop in the bucket. Newcomers to Canada, students looking for off-campus housing, temp workers and downsizing seniors are just a few demographics competing in the fierce rental market.
Data from the City of Toronto’s Rental Housing Update shows that last year, the overall vacancy rate of rentals in the GTA was 1.3%. That number is lower in Downtown Toronto and even lower for condo rentals. This means that at any given time, the city could see less than 1% in unoccupied rental properties for months on end.
Landlords who have decided to ride the wave and hold onto their investment properties can find themselves in the fortunate position of a bidding war. In today’s market, a property that was previously lack-lustre suddenly has more offers than ever seen before. Hopefuls, in a rush to nail down a rental, try to outdo competitors by stretching their budget in a race against time. And as the real estate boom continues, applicants are seeing investors with newly closed units hitting the market- holding back offers. With the recently introduced Ontario bylaw implementing rent increase restrictions, investors are challenged with the task of treading lightly. Holding back offers allow time to commence a lease at a rental rate that both the tenant and the landlord are comfortable with.
It’s Not All Doom and Gloom: There are ways to get ahead of the pack
Having all required documents ready so you can submit an application and sign a lease is one of the most detrimental steps to scoring the property you desire.
Have your employment letters, landlord references, full credit reports and certified cheques ready to submit. If all your documents are attractive and in order, it allows the landlord to make an easy decision.
It is also wise to cast your net wide. Properties within your budget may not be situated in one concentrated area. Figure out how long you are willing to travel to work or school and consider those options alongside of your most desired location.
Lastly, if you don’t need to move immediately. Consider yourself lucky. Now might be a good time to think about investing in an address you can own with multiple condominium pre-sales kicking off before year end. You may not be able to get away from bidding wars completely, but by entering the buyers’ market you will have more opportunities to surrender at your own pace, on your own terms.