Ready to lease that new condo? SUMMER CONDO ELITE
September 28, 2024
Ready to lease that new condo?
BY GERRY DILEO, The Rental Lifestyle Group Inc. | SUMMER CONDO ELITE
YOU SHOULD KNOW THE FOLLOWING:
Purchasing a condominium for rental purpose has become an integral part of the investment
strategy for an increasingly large and diverse group of people. When we started reporting on the Toronto condominium rental market in 2001, the city was coming off a rental vacancy rate of 0.1 percent. Builders were working hard to complete another 18,000 new units that were under construction as reported by CMHC. Investors and tenants alike were also waiting for the
completions, many of which would become rental units. We predicted this cycle would continue for many years. Since that time the market has rewarded most investors with admirable and reliable returns. In its March 2014 report, CMHC estimated that in the City of Toronto alone, there were over 45,000 new condo units under construction. Approximately 43 percent
of the newly completed condo units added to the market for 2013 were rented with the average rent up 9.5 percent from 2012.
WILL THIS TREND CONTINUE?
Do a quick search on the Toronto area Condo market and you will find forecasts from a wide variety of reputable sources. It can get confusing as the predictions range from the most pessimistic to the most optimistic. One thing is for sure though — the condo market will let us
know where it’s heading…when it gets there. What we do know is that this category of housing
has continued its trajectory and looks poised to keep performing well, albeit at different intervals of growth and return for the stakeholders. Rents have increased dramatically since early 2011
when a shortage of rental units resulted in bidding wars on many of the available suites. Although this trend has been diluted by a greater supply of rental condos hitting the market in late 2013, we are still experiencing steady rental demand and a solid rental rate increases in many
specific buildings.
BEFORE RENTING YOUR CONDO
You should be fully aware of the contents of the declaration, by-laws and rules that govern the specific condominium building for which you have an interest.
When you lease your unit, you are required to;
a) Notify the condo corporation, within its specified time period that your unit is leased.
b) Provide the corporation with the lessee’s name, the owner’s address, and a copy of the lease or summary in a format prescribed by the corporation.
c) Provide your tenant with a copy of the declaration, by-laws and rules. As the unit owner you are required to take all reasonable steps to ensure that your tenant complies with the
Condominium Act, the declaration, the by-laws & rules. If you terminate the lease of your unit you are required to notify the corporation in writing.
If you assume interim occupancy of a unit – that is, before
it becomes registered – the developer has the right to withhold consent for you to rent it out, or in the alternative may charge a fee for allowing you to rent the unit, prior
to the buildings’ registration. It is imperative to have a comprehensive lease document
in place that reflects the mutual obligations of owner and tenant.
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Gerry Dileo is a Partner at The Rental Lifestyle Group Inc. The Rental Lifestyle Group (RLG) specializes in Leasing, Management and Maintenance of quality residential suites on behalf of owner/investors and provides, through its’ Real Estate Advisory division, appraisal
services, realty tax reviews, market analysis of rental rates and sales and revenue enhancement strategies. RLG is a regular contributor to Canada Mortgage and Housing Corporation (CMHC) for their annual Rental Market Survey report.
Gerry can be reached at; Tel: 416-340-9676; info@rentallifestyle.com; www.rentallifestyle.com