The Toronto real estate market continues to dominate the news headlines. There have been numerous stories over this past month about how overheated our market is and what might be done to stop it. You hear the “bubble” word a lot. Many are looking at the 15% tax in Vancouver as a potential solution that might chill things here. Trump spoke about the Fed raising interest rates during the debate – this is another move that could have a trickle-down effect on our market. Historically low interest rates have made many people jump into the market that might have otherwise stayed in the rental market.
My opinion is that eventually this voracious demand will lessen to a degree but these new prices are here to stay. It will be very hard to buy a quality income property in Toronto for under $700K (the new city sales average) going forward.
Go Blue Jays (this weekend is it folks). Go TFC. Happy Thanksgiving to all of you and your families. And congratulations to young Owen Snider and the Plex Rockets for winning their little-league championship!
Bidding Wars in the Toronto Rental Market
Now, more so than ever, may be the time to become a landlord in Toronto. The bidding wars for real estate in general in Toronto is causing the rental market to heat up. People that cannot afford the high prices of owning a home are being forced to consider renting as an option. And as such the prices for quality rentals is starting to go up.
I have experienced competition first-hand for people trying to rent places. It is almost like the housing market where you have to strike fast and often offer a little more than the asking price. There can often be several potential renters looking at the same apartment. I have seen basement apartments go for two hundred dollars a month over the asking price. Several articles I have read suggest that one bedroom condo rentals are also at an all-time high.
The vacancy rate in Toronto has always been good for landlords in Toronto. If people are start to fight for rentals as they have been for buying properties, the income property market will remain as strong and competitive as ever.
Should Your Tenant Be Responsible for Cutting the Grass or Shoveling the Snow?
If your duplex or triplex has a big yard, your tenant(s) have both an aesthetic and health interest in doing the yard work. The lawn should be mowed regularly — long grass looks bad, and it attracts rodents and other pests, which are likely to find their way into the house.
Whose responsibility is it to prune back overgrowth, water the grass and plants, and rake leaves? If you have a driveway or paved walkway, who’s responsibility is it to shovel the snow? Your or theirs?
When the use of the yard is included in the rental agreement, it’s natural to presume that responsibility for basic upkeep goes with it. It is part of general maintenance of the premises. In some areas, though, lawn and garden maintenance is clearly the landlord’s responsibility, unless otherwise specified. When a tenant has exclusive use of the yard, responsibility for maintenance usually goes with it, while the landlord is usually responsible for repairs.
Since there is no definitive answer a savvy landlord will spell out the jobs the tenant must do in the lease. A savvy tenant, on the other hand, should read the lease carefully and negotiate modifications before signing it. When there are multiple tenants the landlord should be very clear on who looks after what. Remember that in the winter time Canada Post requires a clear path to your door in order to deliver the mail. Quite often landlords will give a reduction in the monthly rent for doing some of these maintenance chores.
Are You Interested in Investing in Hamilton or Other University Towns?
Since the market in Toronto has been so hot and the returns have been pushed down, many investors are looking outside the GTA to invest in real estate.
We are pleased to announce that Evan J. Wright has joined the Plex team to help service this market. Evan concentrates on investment properties and development opportunities in areas surrounding Toronto’s core. Evan has years of experience as a landlord who owns several multiplexes along the Niagara escarpment. As a seasoned entrepreneur Evan brings a unique skill set that will be invaluable for investors looking to obtain higher cap rates. For more information on the Hamilton, Oshawa and other small Ontario town’s investment market, please contact Evan at email@example.com.