Investors use Middleman Matchmakers
September 28, 2024
Rental reps find solid tenants for luxury suites whose owners see them as longterm investments.
DAVID HAYES
SPECIAL TO THE STAR
Early last week, Han Tang met a tenant in the lobby of the Residences of College Park’s south tower. An insurance executive in his 50s from Montreal who spends more than half the week in Toronto, he was taking possession of his lease. In his 33rd floor two-bedroom, he measures walls and corners to help when he orders new furniture.
“I have floor plans for the entire unit,” Tang, “I can send them to you by e-mail if that helps.”
Tang, who is wearing a waist length black leather jacket and designer jeans, is an engaging 27 year-old.
As she gets out the paperwork, the tenant (who asked that his name not be used) gives her a pile of post dated cheques. Holding up an array of keys, she says: “I have on piece of advice, don’t lose your keys. Security will not open this door for you even if they know you’re a resident.”
Raising his eyebrows, the man chuckles and says, “I’d better not lose these keys, then.”
Whether closing a deal, like this, or showing units to prospective tenants, Tang and her colleague, Sara Kelcey, represent a thriving business: condo rental sales rep. “We specialize in luxury condominiums in the downtown core,” says Tang. “We get executives who are moving to Canada from the U.S or Europe and need some time before they buy a place as well as young professionals making their first purchase. We also get graduate students who are tired of living in residence and older people downsizing after a divorce.”
Tang and Kelcey work for The Rental Lifestyle Group. The company was launched in 2001 by Gerry DiLeo, a civil engineer with experience in construction, land development and marketing, and Larry Morassutti, a chartered account, whose background is in real estate and property management. At first they simply advised investors on their purchases in the booming condo market, but an unfilled niche became obvious.
More and more investors were buying units as long-term investments rather than “flipping” them for short-term profits. So Dileo and Morassutti offered a turnkey operation, relieving investors of the details (and headaches) of renting their units while at the same time providing what DiLeo calls “a matchmaking service” for tenants.
Owners are typically charged one month’s rent, plus a minimum of $100 a month for ongoing management. Assuming the responsibility of landlord, the company deals directly with tenants, including collecting rents and coordinating repairs. The fee rises depending on the time involved. (There is no charge for tenants, although that isn’t the case in the U.S. and Europe.)
“Ten years ago there was no need for a business like ours,” says DiLeo. “If you announced you had something to rent it was gone instantly. But we watched the applications at the city’s planning department. In the downtown core there were 15,000 to 20,000 condo unit sin some phase of development. And no sooner were they completed than another 15,000 to 20,000 units were coming. There’s no sign of that slowing down and most of the investors want to rent them out. Some of them are across the country or overseas and never see the unit or meet any of their tenants. We manage everything for them.” Although virtually no rental housing has been built since the 1970’s, the condo boom has driven up the vacancy rate. “What I didn’t realize,” says DiLeo, “was that tenants would pay significantly more for essentially the same space if it was a condo unit.. It’s the amenities, the security.” (A familiar problem remains, though: Condo rentals do little to help the scarcity of affordable housing for lower income Torontonians.)
Meanwhile, DiLeo’s employee, Sara Kelcey, is taking a prospective, tenant, Lily Ibarra to a two-bedroom on the 35th floor, “I haven’t chosen yet, but I pretty much have to make up my mind over the next two days,” Ibarra says. “I’ve been living in a hotel for the last month.”
Ibarra works in finance for American Express. She was living in Miami before a transfer to Toronto. A petite woman wearing an elegant black wool coat and dark dress pants, she walks purposefully around the $2,400-a-month unit.
“The amenities are,” says Kelcey. “There’s an indoor pool, gym, a huge party room with a pool table and kitchenette and they’re just completing a mini-theatre.”
Ibarra steps out onto the balcony and quickly steps back inside. “I don’t think I’d ever go out there. I’m frightened by heights.”
Kelcey, who is wearing jeans, a wide white leather belt and black sweater, has the same low-key, friendly manner as Tang. “If you’re a balcony girl, I have on the 17th floor. Do you want to see that one?”
The unit on the 17th floor is identical in layout. Ibarra steps tentatively onto the balcony for a few seconds. Kelcey says: “You don’t think you’d go out on the balcony here either?”
Smiling, Ibarra shakes her head. “No, probably wouldn’t. So what’s the paperwork, deposit, all that stuff that you guys would need?”
Later, Kelcey, Tang and DiLeo are discussing the business over dinner at The Keg. I ask Kelcey about Ibarra.
“Sometimes you can tell people don’t want to be pressured,” she says.
DiLeo laughs, “And some people want to be told what to do.”
“Yes,” adds Tang. “Some of them want you to use high-pressure or they won’t make up their mind”
So is Ibarra going to take one of their units? Kelcey shrugs. “You never know if you’ve closed the deal until the day they move in.”