Toronto Star -Ensuite laundries drive condo rentals

September 28, 2024

The condo rental market is so strong, we can’t keep product in stock,says Gerry DiLeo, a partner in The Rental Lifestyle Group.

The company specializes in leasing or managing more than 1,200 condo units in the city for investors.

In the core, we rent pretty much everything that comes across out table. The core has expanded, but it’s considered to Yonge st. to Strachan Ave. and QueensQuay to King St. W.

Prices are area-specific. To speak of average square foot prices for a one-bedroom unit, for example, is irrelevant, he says now building communities you look at, such as the Theatre District or Yorkville.

There is hierarchy to rents that goes roughly like this: Tops is Yorkville, followed by the Theatre District/King-Spadina, the Skydome area, Fort York/CNE, Queens Quay. Condos in the North York corridor have some tremendous efficiencies, DiLeo says.

Scarborough and Mississauga have their own condo rental markets, but the epicenter of the condo market is the core of Toronto, he adds.

Condo rentals are difficult to track because some investors don’t register their tenants with the management office (if there is one.) Also, when new buildings open, a flood of new units come on the market.

It takes 12 to 16 months for a new building to shake out in rents.

DiLeo says the number one reason driving the condo rental market is the safety and security of an en-suite laundry.

The city has changed, density has changed and the necessity of leaving your suite to go to another floor, perhaps a basement, to do laundry gives people pause, he says.

Apartment owners who have renovated buildings to condo quality can’t compete.

The old infrastructure does not allow them to put in laundry facilities in suites, he says.

He says renters will gladly spend $200 to $300 more per month on a condo, because of the amenities.

His office gets 250 to 300 calls and emails a week from people looking to rent condos.

DiLeo, whose company is in its fourth year, says he didn’t set out to become a matchmaker, but that’s what happened. His primary business is helping individual investors, not finding tenants housing, he says. I have investors calling every week saying, Where should I buy? What (rent) can I get for my property?He says

Also, they ask: Should I furnish it or not? If so, what do I need to provide?

Furnished suites account for about 20 per cent of his business. The highest percentage of people in that market are looking for bachelors to one bedrooms, for less than $3000.

Requests come from medical and financial professionals who have relocated and don’t yet know the city.

In the unfurnished market,  demand is really across the board” for anything from bachelors to two-bedrooms plus den.

Foreign students seek unfurnished suites, paid for by well heeled parents wanting quality, comfort and security for their children.

There is still a shortage of units with two bedrooms of similar size, which young professionals like to share. He finds about one in four units with two bedrooms qualify.

This market is very big, he says, and growing.

“If you can get a two-bedroom, with 1,600 square feet for $2,200 to $2,400, rather than a one bedroom at $1400 or $1500 you’re saving money.

To keep up with demand, DiLeo has three young staffers who do a lot of the legwork, showing suites around the city. As well, he has brochures in several sales offices, places classified ads and posts listings on his website.  He also helps investors do their pre-delivery inspection.

Investors pay an average of 90 per cent of one month’s rent, with some paying more depending on the challenge of renting their particular unit-and some paying less.

The biggest mistake some make is overpricing their units. If a unit sits empty for a month or longer, it will take several more months to recover that lost money.

Some lay people don’t understand this.  He says.  Its still an education process for some owners.

He adds that the market is pretty balanced right now; it’s neither a renter’s nor an investors’s market.

It’s important for potential buyers to read their agreements of purchase and sale beforehand, so there are no surprises. The majority of developers will allow tenants in during the interim occupancy period. Others may not allow it, or set conditions and charge extra fees.

Some progressive developers even allow flexible closings to accommodate investors who need to find tenants.

He also works with developers to help with rentals of investor suites, as some projects are aimed at attracting a large number of investors.

When asked what the condo rental vacancy rate is right now, DiLeo says it’s anybody’s guess.

The rate is difficult to establish in a dynamic market. Which he defines as the period starting from one building’s occupancy to the period when the next building in that area starts to occupy.

Investors wanting to get a handle on the rental market should visit www.rentallifestyle.com

Tips for renting out units

Here are some tips for investors who want to rent out their units.

Before you buy, ask your developer if he is flexible on closing. The majority of developers will let you rent your suite during interim occupancy. Condo documents will specify this. Consult a real estate lawyer who specializes in condos with any questions

Should you rent furnished or unfurnished? If furnished, it has to be

fully supplied, right down to the wine0ioener, dish towels and carving knives.

Know your area. There could be a $300 o $500 difference in what you can get for the same square footage, depending on the building and area of town.

Premium suites and unimpeded views can command higher rents.

Don’t overprice your unit. If it sits empty for a month, it will take a long time to recover that money.

Make sure your tenant knows and has copies of the rules and regulations for your building. You should have a comprehensive lease agreement and register your tenant with the management office.  Some condo boards stipulate that only one short-term rental is allowed per year. After that, you must rent it for a full year.

Arrange property insurance and make sure your tenant has contents insurance

Donna Laporte