Toronto Rents – “There has been a gradual insidious change as more people buy houses. There is a lack of qualified renters. Rents are down in real terms.”

“Rent prices are actually depressed in Toronto in real terms – There is a lack of qualified renters. I say this because I’ve been doing this for 15 years and there has been a gradual insidious change as more people buy houses. If 70% of people now own, and 30% do not for a large part the reason is that that 30% is not qualified for a mortgage.
When I look at the criteria used for credit score with my credit checking system, the credit score used for an approved renter is 700, yet CMHC will approve a mortgage for someone with a score of 620 which makes me chuckle a little. My rental screener tells me to decline those with that score. Of course I can’t, you have to pick from the tenants that apply not those you dream about getting!
Rents have gone down in actual terms in apartment buildings. Condo rentals are skewing the market.”

Rachelle at VREAA 26 Nov 2011 5:49am

12 responses to “Toronto Rents – “There has been a gradual insidious change as more people buy houses. There is a lack of qualified renters. Rents are down in real terms.”

  1. I’ve stated before that one of the ways a market deflates if through net earnings, accepting poorer quality tenants or by offering juicy discounts to good quality applicants.

    Remember, the applicants you reject end up somewhere!

  2. You know what’s funny Jesse, juicy discounts do not attract good tenants. Generally they attract people with no money, no job kind of tenants. I’ve run plenty of promotions in my day, but no longer offer them. My current focus is spending the money I saved on promotions on the quality of the rental unit. In all the distressed buildings I turn around my very first action is to get out of the lower end of the market. Quality units=quality tenants

    My preferred renter is someone who could buy but doesn’t want to for some reason.

    • Agreed, Rachelle.

      In the past I have offered a discount after their initial application and interview. And yes crappy buildings will almost always net zero “quality” tenants.

    • “My preferred renter is someone who could buy but doesn’t want to for some reason.”…. Hmmm… put’s a whole new spin on my UnintendedLandLord’s enthusiasm/effusiveness during our initial (and subsequent) negotiations.

      In other news tenancy and property management related, the following Quote ‘O TheDay and accompanying BloomBerg piece will surely amuse…

      “It used to be no one did property management,” said Alan Townsend, a San Diego real estate agent who has managed homes for the past 16 years. “It was the ugly part of the business. Real estate agents think we’re crazy — except when they have no income,” he said. “Those agents are now flooding into the market.”…

      [BloomBerg] – Once ‘Ugly’ Property Management Grows

      http://tinyurl.com/c7y5ayc

  3. We are quality tenants! We came to a red-hot Victoria rental market, fighting to rent a house. In 4 years, our rent hasn’t increased as the pool of good renters has become a bit shallow. We have free run to do what we want to the garden and decorate as we wish. When we do minor repairs around the house (why not practice for the far-off future when we get a place of our own?), our landlord pays us cash for our time. Since our rent is (at most) half of what we would pay in a mortgage, we save the difference. It is quite handy to have totally predictable housing costs, and we know our landlord would do almost anything to keep us. This is a good time to be a decent person, renting a house!

  4. When I spot a person who I know will be a great tenant I’ve always negotiated on the rent to make sure I get them. Now that I am a renter I expect the landlord to negotiate with me and reduce the rent, since I’m QUALITY! Yeah Baby!

  5. Condo rentals definitely distort the rental market in Vancouver. The amounts people are asking for Yaletown box-in-the-sky rentals is nuts. And a lot of the listings just stay up online month after month. And the landlords you get over there are all amateurs just trying to wring out money to pay for the mortgage. My one Yaletown experiment was $1450/month at Yaletown Park 3 for a 450sq ft box that was unliveable between 4-6pm in the summer due to facing a single direction and having tiny windows. The original owner was a space case who sold it after a few months, I think she had a portfolio of other condos too, and the new owner was a school teacher who lived with her parents in Abbotsford (?), whose parents helped her buy it as an investment (for $~350k).

    • Craigslist (which only ever seems to have high end and low end listings, the key to finding a decent place is still looking around on foot) is now filled with all these “fully furnished” “all inclusive” type of rentals for “visiting exec types” I guess (how many of those could there really be in this town?). I guess that’s a higher margin approach for the condo minions to try and get some extra bucks?

    • Sorry to spam, actually found a hilarious Craigslist post on renting at the Capitol Residences downtown: “The capitol is about as classy as a Whalley Highrise” http://vancouver.en.craigslist.ca/van/apa/2723858496.html

  6. Good points. We also rent a house but could easily buy the place. Been here 2.5 years, just renewed lease another year. I compared area rents before renew, seems we’re overpaying but I couldn’t convince husband to offer lower. He feels it would risk encouraging owner (a mortgage broker!) to sell it. Yes, I conceded. And us with credit scores over 800… which should be good for something (since we’re not squandering it on RE)! How to get a discount in future? Since we’re also model tenants in every other respect?

  7. 4SlicesofCheese

    Actually funny story, my brother in law is in Grand Prairies right now working for Husky making 10gs after tax a month.

    He is renting part of a house with his coworker, not sure if its a suite or shared space but landlord lives in the same house.

    He was telling me the landlord, who stays at home while the wife works, steals food and beer from them.

    One day he comes home and notices his mouthwash is half empty, god knows whats going on there
    His coworkers room-mate bought a PS3, but didnt have time to open or get hooked up yet, one day they come home from work and the landlord is playing the PS3.

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