There are roughly 256,000 apartment units in the City of Toronto, but let’s be honest, there is very little to recommend about most of them besides affordability and not having to drag your laundry to the laundromat every weekend. But with condo towers going up faster than you can say “condo bubble”, and with 35% of those units entering the rental pool, now there’s is an opportunity to move into a brand new unit with shiny new appliances, gym amenities just a short elevator ride away and a concierge welcoming you to the building.
Sounds good, right? Well, with the vacancy rate now hovering around 1.4 per cent — down from 3.5 per cent in 2009 — demand for glass-and-granite condos has become incredibly intense in central Toronto, and although the condo boom has created the illusion of lots of supply, there’s not yet enough to keep up with rental demand. Toronto is booming with young professionals and they are pretty set in their minds about what they want and what they can afford. And as square footage is making it’s way to the bottom of the wishlist, being beaten out by proximity to work, vibrant neighbourhood atmosphere and building amenities, the condo rental market is becoming super competitive. Although the competition for rental condos is expected to ease over the next five years, as some 52,000 condo units now under construction across the GTA come to market and the record 28,000 sold last year get built, the high cost of housing and uncertainty about the softening market means potential buyers are likely to rent longer.
So how can you make that knowledge work for you? I worked with rental clients enough to know that leasing a condo can be just as stressful as buying property, that’s why it’s important to get all your ducks in a row well in advance to avoid disappointment and headache. Here are my tips for surviving the Toronto rental market.
1. Save yourself the stress and hire a professional – This is not a shameless plug. Hiring a professional real estate agent is typically free to the tenant and can save you a lot of time and stress. There’s noting wrong with looking yourself on the rental websites or MLS, but as it was the case with my past clients, by the time you enquire about a unit listed on the MLS, often it already has been leased. Realtors have access to listings as soon as they come on the market and also network with other agents that can often provide input on potential properties. Remember, if you’ve given your 60 days notice, you don’t have a lot of time to find a new place. As hot as the Toronto rental market is, you need as much help as you can get.
2. Be realistic and be prepared to pay – People are always shocked how little space they get for what they’re paying. If you’re moving from an apartment building into a condo, expect your rent to go up about 40% and usable space down by about a third. Your rent for a 1 bedroom place in an apartment building might have been under a $1000, but a typical condo unit in Liberty Village or Yonge & Eglinton with parking and locker will run you approximately $1700/month and up. According to Canada Mortgage and Housing Corporation statistics, the 40% premium for a rental condo over an equivalent purpose-built apartment is typical. But if you factor in amenities and factor out square footage — and if you hold out for a good deal — it can almost be a wash. Reality is you can’t even get a bachelor for under $1000, so be prepared for the price difference before you start looking.
3. Plan ahead – Whether you gave the 60 days notice to your current landlord or sold your property and the closing date is fast approaching, time flies so have a plan. Most importantly set your budget, but give it a contingency. Depending on the time of year, you might be able to get a deal, but if you plan to move in the summer be prepared for multiple offers. This means that for one of your offers, there are three, four or five others hoping to get the same unit. Although landlords take into consideration more factors when choosing a tenant than just how much they’re will to pay, be prepared to offer more than the asking price if you really want a particular unit but face competition. Your real estate agent will be able to guide you through the process. Pick a neighbourhood you would like to live in for the next year or so, but remember that prices vary depending on the neighbourhood. Make a Top 3 wishlist and determine if it fits your budget. If you can only afford a 1 bedroom but would like extra storage space, look at units that include a locker. If you’d rather not get rid of the car you’ll need a unit with a parking space, but remember parking comes at a premium especially in the downtown area, so be prepared to pay. What amenities are important to you? Condos offer anything from a gym and a swimming pool to roof top outdoor space, movie theatres and party rooms. If you like to entertain but the 600 sq.ft condo doesn’t quite fit the bill, a party room is a great option.
4. People talk so look good on paper – In other words get all your paperwork in order. I advise all my clients to be armed with a good credit score, letter of employment, salary and even a reference letter from previous landlord. With the rental market as tight as it is, landlords only take AAA tenants. They want a tenant that is financially stable to pay the rent every month and stay on at least a year or so. Of course, these days not everyone has a 9 – 5 job. If you’re self-employed it’s fare to say your annual salary will vary which may raise a red flag with a landlord, so prepare copies of your tax returns to show your income in the past years. Also, in this case it’s especially important that you have an excellent credit score. People with money in the bank but bad credit record get upset about this but remember, money can be easily spent anytime, but the credit record proves that you’re trustworthy.
5. Ask questions before you sign – If you’ve found a great place, thoroughly checked it out and you’re prepared to submit an offer (your agent can assist with this process), it’s time to ask about the details of the lease and any other building regulations. You’ll want to know the following:
- How long is the lease? (Typically one year, although shorter periods or month-to-month are available)
- How much of a deposit is required? (usually first & last month’s rent)
- Are utilities included in the cost of rent?
- Are pets allowed?
- What is the procedure for obtaining repairs to the unit? Is emergency maintenance available 24 hours a day?
- Can I sublet the apartment if I want to move before the lease period is over?
- Can I have roommates?
- What changes can I make to the apartment (paint, wallpaper, carpeting, pictures or shelves that attach to the wall)?
- When can I move in?