December 28th, 2018
The vacancy rate for rental properties in Toronto is among the lowest in the entire country. In October, 2018, the rate was reported to be 2.4%.
As a result, prospective tenants are turning to new methods for grabbing a landlord’s attention. Some are creating rental resumes. Some have even created movie-style posters with accompanying songs to help themselves stand out.
Between the lower vacancy rates and inventive ways that home-hunters are looking to edge out the competition, one thing is clear: there are people in the city that want to rent your apartment, condo or basement. Whatever you have on the market, it’s probable that someone covets that space.
Using a simple supply and demand analogy, rental units are in short supply and high demand. That makes it a great time to be a landlord.
Demand both drives up rental costs and reduces the chances of losing income by having a vacancy.
This sort of demand also means you can be picky about who you rent to; you don’t need to settle for the first applicant, you can weigh the pros and cons of renting to several applicants, basing your decision on credit scores, references and employment status.
Between setting rent at a favourable market rate and having the ability to select a financially stable tenant, landlords gain a lot of security against lost income on their investment (rental property).
Maximizing profits in a favourable market means adhering to the same principles as always. It’s just easier to do.
You’ll want to maximize rent increases wherever possible, since it’s unlikely doing so will make your place undesirable to current and prospective tenants. Just be aware of what the maximum rent hike is this year before getting overly excited.
You’ll also want to take the opportunity to ensure your lease is favourable. Whether that means a mandate for renters insurance or putting the cost of utilities on the tenant, it’s a good time to make the lease you want, not the one you think tenants will want.
It’s a landlord’s market right now, but that doesn’t mean you can get lazy. Screening tenants is as important as ever, and following the rules and regulations surrounding rent collection and fiduciary duties are as relevant as ever.
The main take away here is that you shouldn’t be underselling your property. There’s a large contingent of the city out there that’s hoping to find a place to rent, even willing to compete for it. Take advantage by properly gauging the market and selecting a tenant that any landlord would be lucky to have.