Landlords offering more incentives as vacancy rates continue to rise
21 December 2015
Landlord Michael Stringer used to have potential tenants fighting over
his southwest Calgary condo. He’d have to remove online ads within an
hour of posting them, lest he be bombarded with emails.
But with vacancy rates rising and Alberta’s economy struggling, that’s
no longer a problem. Stringer’s unit has been empty for nearly three
“Maybe two or three people emailed me that they’re interested,” Stringer said.
“I just don’t think those renters are out there right now … this past year’s been a disaster for me compared to how it’s been.”
Calgary’s vacancy rate currently sits at 5.3 per cent, according to the
Canada Mortgage and Housing Corp.’s most recent report in November.
That’s triple what it was the year before.
extreme measures to attract tenants
And with more rental properties on the market, many landlords are going
to extreme measures to attract tenants by dropping prices and offering
“The landlord’s got to do a little extra than they’ve had to do in the
past couple of years to woo tenants,” said Mark Hawkins, owner of
rental listing website RentFaster.ca.
A search of Craigslist, Kijiji, and RentFaster.ca turned up
offers of reduced security deposits, free months of rent, free TV and
Internet, personal training, and even Visa gift cards.
“I encourage landlords, when they ask for my professional opinion, to
try and incentivize, draw some attention to their ad,” Hawkins said.
“Incentives are a big one. Also being flexible on different terms of
their agreement, whether that’s a shorter lease term (or) being more
open to pets.”
Stringer tried a free month of rent. When that didn’t work, he included
all utilities in the price. Then he offered to give the place a fresh
coat of paint in a colour of the tenant’s choosing. Although he says
people seemed to value those bonuses, the condo remains unoccupied.
When Calgary landlord Justin Dos Ramos’ tenant was laid off, he began
the search for a new one. With few applications coming in, however, the
current occupant has had to stay longer than planned.
“We rented it out during the summer, but even then it was easier,” Dos Ramos said.
“Just browsing on websites like RentFaster, it seems like there’s a lot more choice.”
Data from RentFaster backs that up — listings for house, apartment, and
condo rentals are all up compared to this time last year. While
landlords may have had the upper hand for the past few years, Hawkins
says the dynamic is shifting.
“The tenants definitely have some choice, they definitely have some
negotiating room,” he said. “They can take their time to look at more
properties … they are still renting, but it’s more balanced.”
Like Stringer, Dos Ramos offered a free month of rent, to no avail.
After a one and a half months, he tried dropping the price as well.
“It doesn’t seem to have drastically increased interest,” he said.
Now, Dos Ramos says he’s considering less-than-ideal tenants.
“(The current economic conditions) force you to at least consider
certain applications where, in a different market, you’d have so much
choice you wouldn’t need to,” he said.
Stringer, however, has already gone down that road.
One tenant was laid off and needed to move somewhere cheaper. Then, a couple in their early 20s moved in.
“They weren’t the ideal renters but I was kind of scrambling, I’d get
people in there to collect the revenue off the rent,” Stringer said.
When the couple broke up a few months later, the girlfriend left and
the boyfriend’s buddy replaced her. Stringer received complaint after
complaint about condo rule violations until finally, the pair bailed on
the lease altogether.
Now, he says he’s considering cutting his losses.
“It’s to the point where I don’t really want the headache anymore,” Stringer said.
“If it’s empty, I’ve got nothing to lose by selling it. I don’t know what’s next.”
top contents previous chapter