How to Stand Out in a Hot Rental Market
By: Penelope Graham, Zoocasa
It’s no secret that competition for housing is fierce in Canada’s hottest real estate markets. Toronto, in particular, has been making headlines for its increasingly tough rental scene– rampant demand, coupled with fewer available listings, has pushed average rents to stratospheric levels while the city’s vacancy rate plummets to 1.4 per cent, a historical low.
Considering the GTA’s population is expected to expand by another 10 per cent (to an estimated 7,289,500 people) by 2021, the pressure on local rentals won’t let up any time soon. As well, new rent controls from the province that cap annual rent increases to a maximum of 2.5 per cent could make things worse, despite being designed to have the opposite effect, warns the Toronto Real Estate Board.
In its recent Q3 rental report, TREB says the new rules could dissuade developers from creating more rental projects, and investors from renting their units out. It reveals average rent increases are “up very strongly” in the city, with the average apartment one-bedroom rents spiking 11.2 per cent to $1,976, and two-bedroom units now fetching $2,607. Toronto townhouse rents, while slightly more affordable, are still steep at $1,783 for a one-bedroom unit, and $2,138 for two.
“Competition between renters remained very strong for available units in Q3. It is clear that supply is part of the issue,” said TREB President Tim Syrianos, adding that the new rules could dissuade developers from creating more rentals, and investors from renting their units out.
With all signs pointing to fewer rental listings to come, it’s more important than ever for prospective renters to put their best foot forward when applying for a unit, and stand out to landlords. Here are five tips for getting ahead in a super-hot rental market, wherever you may live in Canada.
1 – Prep your application ahead of time.
In a hot rental market, time is of the essence – if you view a unit you love, make your move immediately. That means pulling together your entire rental package pre-emptively, including filling out the application, pulling your credit information, your record of employment, as well as arranging your personal and professional references.
Even a 24-hour delay can put a prospective renter at a disadvantage, so ensure references are prepared for contact, warns Brittany Kostov, a Zoocasa real estate agent with extensive experience in the rental market. “If you can just directly get a hold of someone at your work who is well aware someone will be reaching out at some point, that’s a really good thing to be able to provide,” she says. If you’re working with an agent to find a rental, they can help you with the application preparation process – and will likely insist on doing so before checking out any potential units.
2 – Put your best credit forward
The reality is, a great credit score will open rental doors – landlords want to see that you’ve got a solid history of paying your bills and haven’t left other landlords or payees in a lurch. A great credit score – between the range of 700 and 800 – can be the deciding factors for landlords, who may even go as far to consider your regular debt obligations such as phone, auto, and insurance payments.
“I had a client that went up against another rental application – that other applicant had a car, my client did not, and they made similar income,” says Kostov. “The landlord eventually chose my client because she really did a total picture of, ‘Ok, how much can they actually afford? If rent is $1,500 a month, and your car payment is $600 per month and you’re making $60,000, there’s not a whole lot of wiggle room there.’ They’re really taking everything into account.”
3 – Be prepared to sweeten the deal
A less-than-pristine credit score doesn’t mean all hope isn’t lost – but you may be required to pre-pay for more months up front or even a higher rent rate to make up for it. Offering more than first and last month’s can certainly improve your standing and help you stand out from the pack, says Kostov.
“Let’s say they’ve got a wonky charge on their credit card, they missed on a payment – there’s a story behind everything – and that can affect their credit score,” she says. “They can say, ‘That was a one-off, I can provide six months of rent up front and give it all to you in cash.’ That’ll level the playing field a bit more.”
4 – Maintain a good online image
Planning to smuggle your Pomeranian into a unit when your lease agreement states no pets? Taking a misleading approach with a prospective landlord is usually futile, says Kostov – especially in today’s social-savvy society. Expect to be Googled, and that your LinkedIn, Facebook, and Instagram accounts will be reviewed. Clean up any public profile images and maintain a professional online image during the rental application process.