Finding a rental property in today’s market of the Greater Toronto Area (GTA) can be challenging.
The rental market is very HOT! Vacancy rates are at all time low (around 1%) meaning that landlords (property owners) have their pick of who they want to rent to (and for what price). The housing market affects the rental rates.
The more landlords pay for the property, the higher their mortgage, the higher the rent. And as it becomes harder to buy a home, with low market inventory and more strict mortgage rules, more people turn to rentals.
Bellow are tips on how to navigate the rental market.
- Decide what would you like to rent.
Below are some options:
Houses
- There are many investors renting the whole home to potential renters.
- A lot of homeowners have converted part of their home into an apartment, majority are basement apartments. Some houses have been converted into several apartments. The biggest advantage of renting a house is the opportunity to live in a residential neighbourhood, with private outdoor space.
Condos
- Living in the condo allows access to the best parts of the cities without worrying about maintaining the lawn, having great amenities like gyms, pools, security and party rooms, and they are usually close to public transit.
- Condominiums are very popular among young professionals.
Rooms for rent
- Great for students on a tight budget, and young professionals who are saving for their own first property. Remember, the more money you pay into rent, the longer you will be forced to stay a renter. Renting a room has become the most common practice in the market — and in the long run can save you hundreds of dollars on a monthly basis.
- Where to look for rental properties
There are many options how to find a rental unit, below are some examples of websites:
Realtor.ca; casalova.com; torontorentals.com; kijiji.ca
Of course, you can ask a real estate agent to help you navigate in the rental market. Many renters don’t know that you can hire a real estate agent to find your next apartment— (free of charge to the renter). Many landlords list their rentals on MLS and the real estate agent can help you to arrange a showing for the property to lease, and act on your behalf when negotiating with landlords.
- Location, location, location…...
Do your research on where you would like to live. Remember, it will be your home for at least 12 months, and your neighbourhood will determine and affect your quality of life. Which areas of the neighbourhood are most suitable for you? Points to think of may include: access to public transportation (if you don’t own a car, it is vitally important), Downtown Toronto vs suburbs? Location will also reflect in price range. As an example, per data from Rental Market Report 4th quarter of 2019:
1-bedroom condo in downtown Toronto is approximately $2,300 per month
1-bedroom condo in Markham is approximately $1,900 per month
Sometimes you need to compromise, and I always tell my clients to spend as little as possible on renting. The more money you pay into rent, the longer you will be forced to stay a renter. My advice for single young professionals is to rent with a friend a 2-bedroom apartment instead of a 1-bedroom. Yes, you would have to live with someone, but it is less expensive giving you the opportunity to rent in desirable areas.
- Be prepared if you are ready to rent.
Today’s rental market is extremely fast moving and highly competitive for prospective tenants. In Toronto there are biding wars in the rental market, similar to purchasing a property. In many cases properties are rented the same day. If you find a place you really like, realize that if you ‘take a day to think about it’, it’ll probably be gone tomorrow, that is how fast the market is. Therefore, it is very important to have your papers and information prepared and ready to go in advance.
Required information and documents for each applicant:
- Driver’s licence or valid government ID with picture.
- Full credit report with score and your name on it (e.g. Equifax).
- Employment letter and source of income.
- Pay stubs for the past thirty (30) days.
- References (written preferably).
- Completed rental application.
- Tax returns if for the past two (2) years you self employed or commissioned.
- Social assistance or other government benefits.
Link to rental application form:
http://www.freeottawainfo.com/RentApp.pdf
- Checking the property
Once you found your future home (again, research and go to many showings to compare available places and prices) and won the battle to get the place, make sure to check the property before possession date. Check all appliances and light fixtures. Look in the kitchen cabinets and closets. Flush the toilet, check all faucets. Look for any damages to walls, doors, windows. You want to make sure everything is in a working order, and in good repair — or ask for it to be repaired /fixed. Take pictures of all defects.
Make sure anything your landlord is promising you; have it in writing so there is no future misunderstanding.
- Lease Contract
Next step is to sign a binding contract (lease) which would also require you to pay a deposit prior to the move in date. To rent in the GTA, you will need to provide first and last months rent. Most landlords will require it to be a certified cheque or bank draft.
It is extremely important to read the lease agreement carefully. You might be blinded by the location, or nice and shiny cabinets in the kitchen or lots of storage , beautiful garden etc., but make sure you take your time to understand the details in your lease, or ask your real estate agent to explain it to you, before signing, so there are no surprises such as: what happens if you must break the lease in case of unexpected circumstances.
The lease is a binding document that summarizes your relationship with the landlord – how much rent you will pay, the dates of your lease, rules, what happens at the end of your lease, etc.
It is typically for 12 months and after that (unless you sign a new lease), tenants automatically are ‘month-to-month’–meaning that you don’t generally need to commit for another 12 months. You, however, must give 60 days notice before moving out counting from the first of the next month ( i.e. if you give notice June 23rd, then you could move out on August 31st).
- Know your rights and obligations
As a Tenant in Ontario you have many rights and obligations, make sure to educate yourself to know them. You can find them in the links bellow:
If you have more questions or looking to rent in the GTA, and want help from professional, contact me to represent you (and don’t forget, the landlord pays the fees).
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