Real Estate

Toronto rent skyrocket after new regulations reduce supply and increased demand

  • Last Updated:
  • Jan 29th, 2018 9:34 pm
Deal Addict
Aug 12, 2004
3953 posts
1228 upvotes
Calgary
JayLove06 wrote:
Dec 1st, 2017 10:59 am
Downtown Yonge/College
Sounds like your price is too high...or your place just is not that desirable for the asking price.

As a landlord that has dealt with a recession, even during a recession, there will be interest in a place if it's desirable and the price is right. While we had to lower our rent price from 1500 to 1300 in a year, we got a tenant pretty quickly after we lowered our rent ask, interest shot up pretty quickly. 2 years prior, we could have had rented it for 1700-1800 easily. the vacant spots in Calgary are the stubborn ones reluctant to adapt to the market.

Remember 1.1% vacancy is still vacancy. Just because your place is for rent in a hot market, does not mean people want it at your asking just because it's available.

Lower your rent by 100, and I can bet you it will be rented almost immediately.
Last edited by Firebot on Dec 1st, 2017 1:49 pm, edited 1 time in total.
Deal Fanatic
May 31, 2007
5000 posts
2109 upvotes
Sounds like your rent is too high, especially last time we discussed and when questioned on it, you said it wasn't your fault, the market increase rent too so much.

Some landlords as a strategy try not to squeeze their tenants full capacity but instead, attract more applicants by lowing price a little bit. Then at least you can fill occupancy because no rent + empty unit= no good.

Remember you're not the only one doing this.
Deal Addict
Aug 12, 2004
3953 posts
1228 upvotes
Calgary
Jungle wrote:
Dec 1st, 2017 1:49 pm
Sounds like your rent is too high, especially last time we discussed and when questioned on it, you said it wasn't your fault, the market increase rent too so much.

Some landlords as a strategy try not to squeeze their tenants full capacity but instead, attract more applicants by lowing price a little bit. Then at least you can fill occupancy because no rent + empty unit= no good.

Remember you're not the only one doing this.
It takes a full 12 months to recover the revenue of a lost month from not renting at 100$ less and getting someone immediately. Assuming it takes 30 days to get a tenant at 1500, and immediate interest at 1400. 1500 x 11 (16500) or 1400 x 12 (16800). One is better than the other. If your place is vacant for 2 months, it takes 24 months to recover, and so on...

Sure a landlord may eventually get a naive tenant paying the asking price of 1500$, but the vacant carrying cost is not worth it. Being landlord is one of those situations where you must be smart about pricing, and put your ego on the side and think business first, or else you will fail. It's pretty obvious to most, I'm not sure why JayLove06 chooses to ignore it and instead complains about the market.
Deal Fanatic
May 31, 2007
5000 posts
2109 upvotes
Firebot wrote:
Dec 1st, 2017 2:02 pm
It takes a full 12 months to recover the revenue of a lost month from not renting at 100$ less and getting someone immediately. Assuming it takes 30 days to get a tenant at 1500, and immediate interest at 1400. 1500 x 11 (16500) or 1400 x 12 (16800). One is better than the other. If your place is vacant for 2 months, it takes 24 months to recover, and so on...

Sure a landlord may eventually get a naive tenant paying the asking price of 1500$, but the vacant carrying cost is not worth it. Being landlord is one of those situations where you must be smart about pricing, and put your ego on the side and think business first, or else you will fail. It's pretty obvious to most, I'm not sure why JayLove06 chooses to ignore it and instead complains about the market.
I have no experience with condos in downtown toronto but I did landlord for about 8 years in one of the toughest markets in the GTA south oshawa. Heavy welfare, low income and undesired area. B ut I succeeded and never missed one month's of rent. Built good relationships with the tenants (much like clueless fox posted here. because LTB in Ontario is useless, and tenants really have the power to screw landlords with no recourse.

Experience taught me it was better to fish a good tenant by offering a slight deal. Then because they are getting a slight deal, they are most likely to stay longer term. Tenants are not dumb, they shop around and know market rent too. They know when landlord is soaking them too.

Revolving tenants in and out for an extra $100 is a PITA and not worth the headache. Especially if you get a vacant month, that puts a small dent in your yearly income.

Problem is, investors are running cash flow negative on condos in downtown Toronto- Landlords can't afford to take less rent otherwise they subsidize payment with their employment income.

Those who got in long time ago many not have this problem when prices were much lower.
Deal Fanatic
Feb 29, 2008
5469 posts
1207 upvotes
Firebot wrote:
Dec 1st, 2017 1:49 pm
Sounds like your price is too high...or your place just is not that desirable for the asking price.

As a landlord that has dealt with a recession, even during a recession, there will be interest in a place if it's desirable and the price is right. While we had to lower our rent price from 1500 to 1300 in a year, we got a tenant pretty quickly after we lowered our rent ask, interest shot up pretty quickly. 2 years prior, we could have had rented it for 1700-1800 easily. the vacant spots in Calgary are the stubborn ones reluctant to adapt to the market.

Remember 1.1% vacancy is still vacancy. Just because your place is for rent in a hot market, does not mean people want it at your asking just because it's available.

Lower your rent by 100, and I can bet you it will be rented almost immediately.
I have lowered the rent and it's cheaper than other units in the building. I think time of the year has a lot to do with it.
Deal Fanatic
Feb 29, 2008
5469 posts
1207 upvotes
Firebot wrote:
Dec 1st, 2017 2:02 pm
It takes a full 12 months to recover the revenue of a lost month from not renting at 100$ less and getting someone immediately. Assuming it takes 30 days to get a tenant at 1500, and immediate interest at 1400. 1500 x 11 (16500) or 1400 x 12 (16800). One is better than the other. If your place is vacant for 2 months, it takes 24 months to recover, and so on...

Sure a landlord may eventually get a naive tenant paying the asking price of 1500$, but the vacant carrying cost is not worth it. Being landlord is one of those situations where you must be smart about pricing, and put your ego on the side and think business first, or else you will fail. It's pretty obvious to most, I'm not sure why JayLove06 chooses to ignore it and instead complains about the market.
What exactly are you talking about? You have no information and yet you're making these conclusions. Stop. I have had this property for almost 10 years. The rent was market value and then I dropped it to less than everywhere else in the area.

Rewind back to end of the summer, Yonge and Bloor. Rent was on the low end, I got a few people (salaries were too low) but took me a month to rent out that place. The place that has been the quickest to rent out is Liberty Village. Rent is a bit cheaper but it rents out quickly no matter what.

So relax. Renting is not about avoiding leaving a place vacant. I will leave my place vacant for 2 months if it means I will find a good tenant. If I was hurting for money I'd drop the price 30% and take the first offer. A good tenant is is worth the 1 month vacancy than a bad one.

The point I was trying to make this whole time is these "stories" are BS. Stories of landlords jacking rent 2x and kicking people out were BS. That wasn't the reality. Most I've ever raised rent was $50 after 2 years. So now the stories of people not being able to find a place to live and all that isn't really true. There's plenty of stock out there.
Deal Addict
Aug 12, 2004
3953 posts
1228 upvotes
Calgary
JayLove06 wrote:
Dec 1st, 2017 3:37 pm
I have lowered the rent and it's cheaper than other units in the building. I think time of the year has a lot to do with it.
It does. Been in that situation when we first rented our unit. It also means you are very likely to be holding the unit until at least mid January if interest doesn't pick up on your unit, as moving in is quite rare over holidays. You will need to decide if you want to potentially hold it for another 1-2 months. There is no harm in providing a free month rent to a tenant in order to lock in at the price you wish. It's a great tactic, while you do lose out on one month rent, locking in a tenant at this time of the year is better.
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Sep 8, 2007
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Way Out of GTA
Firebot wrote:
Dec 1st, 2017 3:48 pm
It does. Been in that situation when we first rented our unit. It also means you are very likely to be holding the unit until at least mid January if interest doesn't pick up on your unit, as moving in is quite rare over holidays. You will need to decide if you want to potentially hold it for another 1-2 months. There is no harm in providing a free month rent to a tenant in order to lock in at the price you wish. It's a great tactic, while you do lose out on one month rent, locking in a tenant at this time of the year is better.
Renting out at $100 lower per month now has the negative effect of locking you into renting it for that amount with little chance to increase it...say if the tenant stays 3 years. Whereas a free month..allows you to get the tenant while setting a monthly rent at the higher rate...which may pay off if they stay longer term.
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Feb 29, 2008
5469 posts
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cartfan123 wrote:
Dec 1st, 2017 6:30 pm
Renting out at $100 lower per month now has the negative effect of locking you into renting it for that amount with little chance to increase it...say if the tenant stays 3 years. Whereas a free month..allows you to get the tenant while setting a monthly rent at the higher rate...which may pay off if they stay longer term.
Exactly! Precisely why rents will stay high with these new rules.
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Jan 5, 2003
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cartfan123 wrote:
Dec 1st, 2017 6:30 pm
Renting out at $100 lower per month now has the negative effect of locking you into renting it for that amount with little chance to increase it...say if the tenant stays 3 years. Whereas a free month..allows you to get the tenant while setting a monthly rent at the higher rate...which may pay off if they stay longer term.
yes... the math above doesn't take into account average stay. If you're renting to a student who will be there 1 year then it makes sense. If you're renting to a professional or family who will likely stay longer it doesn't.
Deal Fanatic
Feb 29, 2008
5469 posts
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Flavour wrote:
Dec 2nd, 2017 10:37 am
yes... the math above doesn't take into account average stay. If you're renting to a student who will be there 1 year then it makes sense. If you're renting to a professional or family who will likely stay longer it doesn't.
If your tenants typically sty 2-3 years each, then $100 adds up to a lot of money with the new rules.

$2400-$3600. That works out to quite a bit more than losing a month rent.
Deal Fanatic
Feb 29, 2008
5469 posts
1207 upvotes
cartfan123 wrote:
Dec 1st, 2017 6:30 pm
Renting out at $100 lower per month now has the negative effect of locking you into renting it for that amount with little chance to increase it...say if the tenant stays 3 years. Whereas a free month..allows you to get the tenant while setting a monthly rent at the higher rate...which may pay off if they stay longer term.
I didn't drop my price and ended up getting it rented. If I dropped it $100, it would take me years to recoup if the renter stayed. It's a different game now for landlords. I do hate being lumped in with the bad landlords, though. Think I'm pretty damn good.
Penalty Box
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Dec 13, 2016
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Someone upvoted me on page 5, so I read a bit about hopes and dreams of real estate bears and as usual they were clueless and wrong once again.

Happy New Year
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Dec 8, 2007
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BiegeToyota wrote:
Dec 30th, 2017 9:51 pm
Someone upvoted me on page 5, so I read a bit about hopes and dreams of real estate bears and as usual they were clueless and wrong once again.

Happy New Year
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