If you think getting into Toronto condo rentals is already tough, think again. Market conditions are making it more challenging for renters.
It’s not uncommon to see condo rentals go above asking price. I’ve represented landlords who have gotten multiple offers and rents way above their asking price.
The average monthly rent for a condo in Toronto broke the $2,000 mark for the first time. The average rent rose above 10% (year-over-year) at $3.10 per square feet. This is even happening outside of the Toronto area. In the 905 region, Toronto condo rentals rose 7% to $2.14 per square feet on average.
The number of Toronto condo rentals listed for lease dropped 13% as a result of the surging demand. The number of available listings fell to 930 units, a five-year low.
What’s affecting Toronto condo rentals
Several factors are driving rents up:
- A tight resale market
- Limited rental inventory
- Increasing demand
The recent introduction of tighter mortgage rules have pushed some buyers into renting territory. The number of new construction condos remains limited. And even purpose built rental apartments are scarce, with a recent vacancy rate of 0.6%.
It’s not uncommon for you to have a difficult time finding condos available for rent in Toronto. Even if you are working with a real estate broker, they’ll likely share that frustration with you. You just don’t see the same number of rental listings available on the market today as you would have seen even a year ago.
How to compete (and win) against other renters
A challenging market for Toronto condo rentals means you have to be prepared to compete with other renters. You need to have a smart approach when preparing your offer to rent.
Too many times I’ve seen tenants poorly represented by their agents. They don’t come to the table with everything prepared. So they end up losing (in a multiple offer rental situation) or not getting it at all (even if they’re not competing with anyone else).
Here’s what you need to do to beat other renters and get the condo you want:
Prepare all your documents
Fill out the rental application. Order a credit report. Have your employment letter ready. Dig out those T4’s and NOA’s (notice of assessment). Keep your recent pay stubs handy.
You’ll be surprised how many times I’ve asked tenants to do this and they grumble at the amount of ‘work’ they have to do.
Let’s face reality. In today’s competitive rental market, if you don’t have all your documents in order, another renter will. And they’ll beat you.
Be proactive and have all of these ready.
Expect to pay more than asking
In many situations, it’s no longer enough to pay just the asking rental price. You have to go over it. This is quickly becoming the norm in Toronto condo rentals today. Just expect it to happen.
When you’ve found a place you want to rent, and more than one renter is bidding on it, you’ll have to go over the asking price. But ask your real estate broker what’s reasonable.
You have to act fast
Once you see a place you like, act fast. You need to make an offer right away. If you’ve prepared your all your documents and have everything in order, there’s no reason why your agent can’t whip up a proper offer in a matter of hours. This is one way to beat out other condo renters.
Keep in mind that landlords and their agents are also becoming savvy. Some might be ‘out of town’ and set a specified date and time for the offers to be presented. Manage your expectations and expect this to happen.
Look at alternatives
There are certain areas in the city where it’s going to become even more hyper competitive. Start looking at alternatives. For example, Scarborough condos along the subway or RT line might work out for you. But believe it or not, multiple offers on rentals in Scarborough are also becoming common.
Above all, you need to have a bit more patience. The real estate market is going crazy, it seems. But it really just boils down to supply and demand. Buyers are turning into renters. Existing renters have to outbid each other. And the supply of rental condos and apartments are being gobbled up.
This is just the reality in today’s marketplace.
Feel free to give me a shout if you need help or have any questions.
(Data source: MLS statistics and Urbanation.ca)