A drop in rents could impact home prices across Canada

RENT PRICES TO DECLINE???

“With property investors basing their price expectations on the assumption that rents would instead keep rising strongly, this represents a big risk to house prices,” Steven Brown, senior Canada economist at Capital Economics, wrote in a note to clients Thursday.

Recent reports from rental websites such as Padmapper and Rentals.ca show a rapid decline in rents in major Canadian cities such as Toronto, Ottawa, and Vancouver and Montreal.  Brown said the surge in unemployment among low-income earners, a drop in immigration, and a decreased demand for short-term rentals were among the factors contributing to high vacancy rates, which is driving rental prices lower.

He added the halt in immigration and rise in supply could be “very significant” for the country's real estate sector. He noted immigration into Canada has plunged to almost zero since mid-March when international travel restrictions were put in place due to the COVID-19 pandemic. Brown estimates Canada saw approximately 30,000 new arrivals per month prior to that.

“Even if travel restrictions are soon loosened and vacancy rates rise by far less than these extreme scenarios, rents seem likely to decline by at least five per cent to 10 per cent in Toronto and Vancouver,” Brown said. “That represents a big risk for house prices.” 

While Brown acknowledged there’s uncertainty around future vacancy rates, he said the situation “looks very concerning in Toronto and Vancouver” as those cities have the highest amount of short-term rentals and new immigrants.

Using Toronto as an example, Brown said an increase of the vacancy rate to 4.5 per cent from 1.5 per cent could cause a 15-per-cent decline in rent prices.  

“Many recent investors reportedly already faced negative cashflows as rents were too low to cover all their expenses,” he said. “With rents now falling, some may sell properties, which could cause a drop in house prices in excess of the five per cent we have pencilled in.”

Earlier in the week, the head of Canada Mortgage and Housing Corporation (CMHC) warned home prices could fall as much as 18 per cent over the next year if the economy doesn’t recover sufficiently.

Source: BNN BLOOMBERG - https://www.bnnbloomberg.ca/falling-rents-pose-a-big-risk-for-home-prices-capital-economics-1.1439432

Tribunal upholds Toronto rules on short-term rentals like Airbnb

Tribunal Ruling

on short term rentals

Limit on Homeowners

For those looking for a place to live in Toronto, the Ontario Rental Tribunal has sided with the city of #Toronto when it comes too putting a limit on how homeowners can rent out their properties and that includes short term rentals like Airbnb. The rules haven't taken effect yet but it will be a game changer and could free up thousands of units across the city under new guidelines. Homeowners listing their property for a short term rental which is less than 28 days can only rent out their primary residence for a maximum of 180 nights per year!

The rules were approved by city council back in 2018 but were appealed before taking effect. The group Fairbnb which has ties to the hotel industry has been pushing for those guidelines since 2016. They say this decision could not only free up more space for renters but also creates new opportunities in the hospitality industry.

Thorben Wieditz is the spokesperson for Fairbnb and states "It essentially legalizes true home sharing which means that you and I can rent out our own place when we go away on vacation or are away on the weekend. But you and I cannot stock pile, lease up or buy up dozens and dozens of residential housing units. So I think what's happening too is that we see a lot more hotels being built in the city of Toronto. For example, if you know there is not unregulated competition from ghost hotels because investors would see it is okay to invest into Hotel stock which actually makes sense in a city, especially if we don't have to compete with the grey market."

Airbnb released this statement in reaction to the Tribunal decision it reads “While this ruling provides regulatory certainty for home sharing in Toronto, we continue to share our host concerns that these rules unfairly punish some responsible short term mindful hosts who are contributing to the local economy. We remain committed to working closely with the City of Toronto and the Airbnb community as these new rules are implemented."

 The city has not said exactly when the rules will take full effect and information is expected to come next month.

How to have a smooth move-in day

How to have a smooth move-in day

It can be a long process to find a place you want to move into, undergo reference checks and credit checks and sign a lease. If you’ve done all these steps, then everything is ready for you to move in. All you need to do is move your life into the new space, which can be a challenge in itself.

Moving can be a hectic process, but there are some things you can do to ensure everything runs smoothly and that you have a good moving day.

For starters, decide on a date on when you want to move. If you’re moving from rental property to another, make sure you give your previous landlord sufficient notice. Some renters can afford to pay rent at both places for one month, which makes the move less hectic, but also more costly. Whatever you decide, both your previous landlord and your new landlord need to know when you will be moving out or in.

Once you have a date agreed upon, if you are hiring a moving truck or a moving company, you need to book them as soon as possible.

A few weeks before you start moving, it’s important for you start arranging your belongings and prepping boxes ahead of time. Separate your items between what you plan to keep and what you can get rid of, whether you donate it or toss it. Also, label your boxes to make it easier to find everything.

While looking at the items you plan to keep, determine what needs to be taken part before it’s moved and get that done earlier so you’re not trying to take a part your bookshelf on the big day.

Meanwhile, don’t forget to change the address for any bills, banking or credit card statements, magazine subscriptions or important documents. Even after you move, either set a forwarding address for the leftover mail to be sent out or notify your previous landlord that you may drop by on occasion to pick up any mail that continues to be sent to that address. You may also want/need to purchase tenants’ insurance and if you’re doing so, contact your insurance company ahead of time to notify them of the change in residence.

Also a day before the move, confirm with the moving company the time they’re expected to arrive and the location to avoid any confusion or delays. You should also have the keys or have an appointment set up with your new landlord to receive them on the day of your move.

On the day of the move, you should have a bag/box packed with all essential, which should be clearly labelled. If you’re moving out from another rental property, make sure the fridge is clean and any other leftover food items are either packed or tossed. Once all the boxes are moved, inspect the space to ensure you have everything.

Once you arrive at the new location, unload all your belongings and settle into your new home!

What can a Landlord ask potential renters about?

What can a Landlord ask potential renters about?

When a landlord meets a potential tenant for the first time, they likely want to know as much about you as you want to know about the property.

Some questions they’re allowed to ask include what your current job is and how much income you earn in a year. While this may seem too personal to you, this helps a landlord evaluate whether you earn enough to consistently pay rent on time. Landlords may also ask you to provide proof of employment from your employer since this verifies your job situation.

To learn more about a person’s financial situation, landlords are legally allowed to ask a potential renter for written permission for a credit check. While a person’s income gives landlord’s idea of how much money the renter earns, the credit check paints a better picture of the amount of debt a person is responsible for and whether they can afford their debt payments and expenses with their income. This helps a landlord ensure they won’t be stiffed on their monthly rent.

The number of people living in the space and who they are is also a question your landlords can ask. If there are other adults, a landlord may ask for their proof of employment as well. All homes are built in a way that follows health and fire safety regulations and landlords will need to know the number of people living on the property to ensure they’re follow these laws.

While renters see owning pets or smoking as their own personal choices, a landlord is allowed to ask a tenant these questions since they could be concerned that these choices will affect their property value. Landlords aren’t allowed to charge a monthly pet rent, but they can charge a pet damage deposit to renters. Each province and territory has its own pet deposit legislation, so be sure to check out details on what’s legally allowed.

A landlord may also ask for a reference, which could be your past landlord, and their contact information since they’ll want to learn more about how you are as a tenant. They might ask your previous landlord whether you paid your rent on time, whether they received many complaints while you were staying there or whether you took care of the property.

Tenant FAQ’s

Tenant FAQ’s

How long of a lease do I sign?

The minimum term is one year however you can sign longer if the owner agrees to the term.

What do I need to provide when applying for a rental property?

You will be required to fill out an application on the property giving as much detail about yourself so that Renting Toronto can perform a credit check. You will also need to provide a letter of employment and a copy of a recent pay stub.

When signing the lease, what do I need to bring with me?

You will be asked to bring 2 bank drafts and 10 post-dated cheques when signing a one year lease agreement. One is payable to “Renting Toronto.” This is applied to your first months rent (You will get a receipt for this). The second bank draft is payable to the owner and is applied to the last months rent and you will get a receipt for this as well. Bank drafts also have a carbon copy from the bank, which acts as a receipt.

Who pays for the Rental Agents fees?

The landlord pays our placement fee out of your first months rent.

Who do I call if I have trouble with an appliance or something else in my rental?

You will call the landlord directly. Some owners have insurance on appliances or they are covered under warranty. If you feel you would like to discuss an issue with Renting Toronto first prior to speaking with the Landlord, we are here to help.

How do I legally notify the Landlord that I want to end my lease at the end of the term?

You need to give the landlord 60 days notice and send an N9 Form that can be found at the Landlord and Tenant Boards website: www.ltb.gov.on.ca - If your initial lease expires on August 31st you would need to send the landlord an N9 Form on or before July 3rd. The same form is given if you are on a month-to-month lease.

Do I need to get my own insurance for my rental property?

You do need to get your own contents insurance when living in a rental unit. This covers any of your personal items in the rental property. The owner has separate insurance that covers the structure itself. The cost is a low monthly payment, which can now be purchased at some banks. The owner will ask for a copy of your policy as they will need to provide it to there own insurance company.

Can I extend my lease?

You can extend your lease for another year. Just ask the landlord 60 days prior to the end of your initial lease term. Renting Toronto provides a free updated lease agreement to the landlord to make the transaction easier. You will just need to provide 12 more post-dated cheques and bump your initial pre-paid last month to the end of the new tenancy agreement. If the rent is increased you will need to provide the difference in the rental deposit to the landlord.

What does a month-to-month lease mean?

After you have completed your initial one-year lease agreement you automatically enter into a month-to-month agreement. If you don’t send the landlord a N9 Form 60 days prior to the end of your initial lease you automatically enter into a month-to-month agreement. Once you are in a month-to-month agreement you are still required to give 60 days notice and file an N9 Form to end your tenancy agreement. You are still bound by the initial agreement you signed even if you have been on a month-to-month situation for years.

 Who governs the Landlord Tenant act in Ontario?

The Landlord & Tenant Board sets the rules that are applied to any residential tenancy agreement. You can find more information on there website at www.ltb.gov.on.ca or call them for free consultation at 416-645-8080

Landlord FAQ’s

Landlord FAQ’s

What information does Renting Toronto obtain get when they do a background check?

Our company is associated with a program that is considered “The rental housing industry’s credit bureau” which provides a tenant report, criminal report, full credit bureau report and a North America wide tenant database search on each applicant.

What is the standard lease length?

All our tenants sign a minimum one-year lease agreement. The option is always available for the tenant to sign a longer lease if the landlord agrees to the terms. All our leases have been written by a real estate professional and are in accordance with the landlord tenant act of Ontario.

How much can I increase the rent?

You can increase the rent if at least 12 months have passed since the date of the last rent increase or since the date the tenant moved into the rental unit. You must give the tenant the Notice of Rent Increase (N1 Form) at least 90 days before the date you will increase the tenant’s rent.

How do I give my tenant a N1 Form to increase the rent?

• You can hand it directly to the tenant or an adult in the rental unit

• Leave it in the tenants mailbox or where mail is ordinarily delivered

• Place it under the door of the rental unit or through a mail slot in the door

• Send it by fax to a fax machine where the tenant carries on business or to a fax machine in their home

• Send it by courier

• Send it by mail

How and when can I access my rental property for maintenance?

• A landlord may enter the property to inspect for maintenance problems or make repairs by giving the tenant at least 24Hrs written notice before the landlord plans to enter. The written notice must include;

• The reason why the landlord wishes to enter,

• The date the landlord will enter, and

• A time of entry between 8:00 am and 8:00 pm

 

 What is the formula for a rental increase?

Each year the Ontario government announces the province’s rent increase guideline for the following year. The rent increase guideline is the maximum amount by which a landlord can increase the rent for a current tenant without approval from the Landlord and Tenant Board.

Moving to Toronto

Moving to Toronto

Moving to Toronto? Here are some helpful tips for getting acclimatized.

The City of Toronto is booming. Canada’s financial and cultural capital recently became the fourth largest city in North America, and in February the Toronto census metropolitan area broke the 6-million person mark. Throw into the mix a thriving music and arts scene, an up and coming food culture, a potential 2024 Summer Olympics bid, and the fact that Toronto is one of the world’s most multi-cultural cities, and it’s safe to say that now is a prime time to consider a Toronto condo rental.

Whether you’re making the move for career purposes or are simply anxious to experience the excitement of a growing city, here are some helpful tips to make your search for a Toronto condo rental and your move to Toronto in general a positive experience.

Sun, snow, or rain, there’s always something to do

There’s no use denying it: Toronto winters are cold, though not as cold as in cities like Montreal, Ottawa, or Calgary. And while chattering teeth will come as no surprise to a Toronto newcomer, the summer heat might. Temperatures often rise above 30 degrees, giving residents a chance to enjoy Toronto’s many public beaches, pools, and parks. It doesn’t cool off much at night, so consider a unit with AC for your comfort.

Regardless of the weather, there are always fun and exciting ways to fill your days in Toronto. To name only a few, the city is home to the Toronto International Film Festival, a world renowned Pride Week, Caribana, Nuit Blanche, and the NXNE music festival.

Getting around

The Toronto Transit Commission – or TTC, colloquially – includes a system of streetcars, subways, and busses that can deliver you to nearly everywhere you’ll need to go. The majority of downtown Toronto condo rentals provide easy access to the TTC, making your commute to and from work a breeze. The subway provides a hassle free alternative to frustrating city driving, and will help you save on parking, which can be expensive.

Many downtown residents also choose walking or cycling as their transportation methods of choice. Downtown Toronto is becoming increasingly bike-friendly, and some brave commuters will cycle year-round. Downtown’s simple grid pattern makes finding your way around easy, and you can nearly always use the CN Tower as a compass pointing south.

The city is expensive, but…

Like all world-class cities, Toronto is expensive to live in. As is the case in much of Canada, house prices have soared over recent years, and the average price of a detached home is upwards of $1-million. However, Toronto condo rentals are a viable alternative to home ownership, one that young professionals and millennials are increasingly open to. Opting to rent over buying gives you more freedom to choose which neighbourhood you live in, will free up money to go out and enjoy the city’s amenities, and will give you the flexibility to move as you see fit.

At Renting Toronto, we’ve been in the business of placing qualified tenants in owners’ and landlords’ properties since 1999. There’s never been a better time to live in the city, so check out our extensive Toronto condo rental listings and feel free to contact us today.