Real Estate

Can't find a serious tenant, should I drop the price? GTA 2bd Condo

  • Last Updated:
  • Jan 12th, 2020 1:29 pm
[OP]
Member
Sep 11, 2017
216 posts
140 upvotes

Can't find a serious tenant, should I drop the price? GTA 2bd Condo

Hello All,

I obtained occupancy on my west Toronto investment condo (in Nov 2019) and have listed the place at comparable rental rates as seen on rental sites and advised by area realtors. I’ve been unsuccessful in finding a tenant to agree to take on the lease. I was considering dropping my price by 11% compared to someone with the exact same unit/finishes in the building that is listing their unit. Is this a smart move? I feel I could probably have gotten someone to take on the full lease if I was listing during the spring, but to get occupancy during the winter is forcing me to take a haircut on the price. Running the #'s it seems I'm better off to get it leased now for a discount then wait for the spring in hopes of someone paying full lease price. Has anyone else been in this situation? What did you do?

Thoughts welcomed…
40 replies
Deal Fanatic
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Sep 8, 2007
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Way Out of GTA
Rental activity tends to be rather slow up to and over Christmas. 11% drop in one shot might be an overshoot. Perhaps start with a 5% drop then an additional 5% in a few weeks. Make sure your ad is refreshed every few days. Make sure the pictures are good quality and not some dark blurry uninviting garbage. Trying to get absolute top dollar can reduce the pool,of tenants. Many quality tenants know what a place sohould go for and not likely to overpay just to get a place.

One thing is do not compromise tenant quality just to fill up the condo sooner. The headaches and costs of bad tenants can linger for years.
Last edited by cartfan123 on Jan 6th, 2020 4:37 pm, edited 1 time in total.
"It is in times of great fear or greed that the most opportunity exists."
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Aug 11, 2019
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Toronto
The way I look at is every month without your unit being rented is 8% you’re never going to get back.

So if you know you can rent in a month for $1k, or rent it today for $920... I’d rent it out for $920.

Best of luck!
Real Estate Agent
GTA & Surrounding Areas
[OP]
Member
Sep 11, 2017
216 posts
140 upvotes
@cartfan123 great points and I agree tenant quality is paramount. Once I dropped the price im starting to see more activity...it will impact me on my year 1 projections but I can hopefully begin to recoup some of that in year 2 of the lease. For now I'm focused on finding a quality tenant and building a great relationship with them

@Dayravi good point. Comparables for my 2bd/2bth condo are going between $2600 - $2550 (in the winter months). The exact same unit as mine is listed for $2580 (I had originally listed for $2600). I had begun to drop my price to $2500 for a week, then $2400 and now I'm at $2295. I'm getting more hits and showing requests now...
Deal Guru
Feb 29, 2008
10956 posts
6154 upvotes
Dayravi wrote: The way I look at is every month without your unit being rented is 8% you’re never going to get back.

So if you know you can rent in a month for $1k, or rent it today for $920... I’d rent it out for $920.

Best of luck!
Not With today’s rent controls. If it’s priced well, wait it out. It will be worth it. This is a tough time to rent. You should have better luck now.
Jr. Member
Nov 5, 2017
132 posts
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I am curious, will you be in Negative cashflow from day 1?
Jr. Member
Aug 21, 2017
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His property is occupied later than 2018 and thus not under rental control.
Deal Guru
Feb 29, 2008
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fiddlewin wrote: His property is occupied later than 2018 and thus not under rental control.
For now. I wouldn’t count on anything.
Banned
Dec 10, 2019
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Honestly this is a sign of things to come. You should look at selling the unit, you'll thank me later....
Member
Jun 23, 2009
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Toronto
Medeomedeo wrote: Honestly this is a sign of things to come. You should look at selling the unit, you'll thank me later....
Quite possibly correct, thousands of units flooding the markets soon
Deal Guru
Feb 29, 2008
10956 posts
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Medeomedeo wrote: Honestly this is a sign of things to come. You should look at selling the unit, you'll thank me later....
Sonduren wrote: Quite possibly correct, thousands of units flooding the markets soon
Face With Tears Of JoyFace With Tears Of Joy
Deal Addict
Jan 17, 2006
1937 posts
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Toronto
Sonduren wrote: Quite possibly correct, thousands of units flooding the markets soon
Don't hold your breath, vacancy is still close to 0 in TO and more and more people are arriving daily, outpacing supply by large number.
Deal Addict
Jan 17, 2006
1937 posts
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Toronto
OP, you don't have it under rent control, so you can definetely rent it below market and bring it back to market in one year.
Jr. Member
Jan 2, 2019
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yes tons of immigrants coming that will pay $2600 for a two bedroom
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Aug 11, 2019
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Toronto
JayLove06 wrote: Not With today’s rent controls. If it’s priced well, wait it out. It will be worth it. This is a tough time to rent. You should have better luck now.
His condo was occupied this year, so he wouldn't be subject to rent control restrictions.
However, we can't predict the next government, so rent control could be reinstated to all units in the near future.

I think it's a reasonable risk to drop the price by 8% for a quick lease.
A1 tenant will always be important though...
Real Estate Agent
GTA & Surrounding Areas

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