September 28, 2024
Firm Busy Matching Renters with Condo Units
Professionals, students like downtown
Healthy market ‘good news for investors’
DONNA LAPORTE
STAFF REPORTER
Gerry Dileo is so bullish on Toronto condos; he just bought one as an investment himself.
Dileo, a partner in The Rental Lifestyle Group, which manages about 2,000 condos for investors, says hi centrally located condo, yet to be built, will have great views of the Toronto downtown.
And no, he’s not telling where it is.
But whether investors buy in key areas such as the Theatre District, the financial District, College and Bay or Yorkville, renters seeking the urban lifestyle will find them.
Hi company is in its sixth year.
Originally, his business was aimed at helping investors, but it naturally evolved as a “matchmaking” service. Dileo says he gets about 300 calls a week from people looking for a condo rental unit.
“It’s good news for investors,” Dileo says. “It’s still a very strong market. It tells me that there are still a lot of people moving into the city.”
August was a record month for rentals. And although September has seen a bit of a slowdown which typical, he adds virtually everything that has come across his desk is rented.
Sara Kelcey, a sales and marketing executive with the company, works on the front lines of the business, helping investors decide what to charge, whether to furnish suites and how best to do so.
She says furnished suites account for about 30 to 40 per cent of their business, depending on the time of year. The majority of people stay for two to three months, with others staying for less than six months. Those include corporate relocations, people working on short-term projects and divorcees.
The majority of condo renters’ downtown whose rough boundaries she draws as Bloor St. to Queens Quay and Spadina Ave. to Sherbourne St. are young professionals.
Others are students whose parents help subsidize their rent or pay it completely. She says when new buildings are registered (meaning owners get title) there may be a glut of units on the market, but they get absorbed quickly.
(Some developers let investors rent out units during interim occupancy; others strictly forbid it.)
Kelcey gives some general ranges of rents from her current inventory: an unfurnished bachelor unit of more than 400 square feet in size can rent for up to $1150. If parking is available- and it often isn’t for smaller units-add another $100 to $150 per month she says.
Furnished bachelors over 400 square feet can rent for up to $1850, without parking.
Unfurnished one-bed-rooms, ranging from 510 square feet to 600 square feet, command $1250 to $1400; add another $150- if parking is needed.
Furnished one bedrooms of the same size go for $1800 to $2,200, with parking an extra $150 per month.
Prices climb from there as unit sizes increase, with unfurnished two-bed-rooms at the top end (850 to 1,000 square feet) going for $1,850 to $2,400; if furnished, expect to pay $3000 to $4,000.
Kelcey says each building is a micro-community; rents can vary by building, neighborhood and amenities offered.
She pegs the investor portion of the condo market at up to 50 per cent downtown, but no one specifically tracks this market, so it’s anybody’s guess what the actual figure is.
Also, people’s plans can change from the time they buy to when a building is completed. They may decide to move in.
Jason mercer, Canada Mortgage and Housing’s senior market analyst for the GTAQ, says there is no broad survey on pre-construction. CMHC’s 2005 survey of registered condo stock-that is, those units that have completed their closings-shows investor penetration of 18 to 19 per cent.
Mercer says a new survey expected to be released in mid-December will marry rental and condo stock to allow for true comparisons.
Condo analyst Barry Lyon, president of consulting firm Barry Lyon Consultants, puts investors at 20 to 25 per cent of the market, but adds no one knows for sure.
The figure can vary from building to building –as low as 10 per cent in some to 50 per cent in others.
As for the condo market’s health, Lyon as, “the overall market and the investor market are co-existing rather nicely.” Units are being absorbed because of the deterioration of the city’s existing rental stock.
He adds that investors are good for the market, as they help developers get to 60- or 70 per cent of preconstruction sales, which helps secure financing.
He also notes that many investors own one or two units, but it’s not uncommon for people to own three to five: two or three downtown, plus one in Mississauga or Markham or North York.
Lyon says the lower the rent the easier it is to rent the unit out; investors often choose bachelors and one-bedrooms on a building’s lower floors.
Investors tend to have a five to 10 year horizon, making adjustments as family needs change, Lyon says. A son or daughter may attend university and take over the unit for a while. Or, the investor may rent out the unit to break even and wait out the longer-term market.
The Rental Lifestyle Group can be reached at 416-340-9676 or by visiting the website at w.ww.rentallifestyle.com