Rent a condo?
Renting a
condo can make more sense than buying one.
In some of the downtown Toronto condos, up to 85% of all the units are
bought by "investors" who
have no intention of living in them. They either plan to flip them for
a quick profit, keep them for a few years and rent them out. They hope to make
money in capital gains when prices go up.
In 2006, there were 41,749 rented condos in the area, according to
figures from the Canada Mortgage and
Housing Corporation. By last year, that number reached 77,255
and continues to grow.
This means there are a large number of condo owners who are looking for
good tenants and that will help to keep rents in line.
Renting an older condo
The rents are cheaper, especially if you look outside the downtown
areas. A twenty to thirty minute subway ride can result in far lower
rents.
Renting—the up
side
There is a large supply of rental condos, with more coming on the
market every month, so there is lots of choice. You can pick the building that has all the amenities that you think you
will use at a price you can afford.
Risk
free
Living in a condo for a year gives the renter a good feel for how well
the building was built, how it is managed and maintained. You also can
tell what type of people are attracted to the building;
seniors, young people, families, students or short-term renters..
If the walls
are so thin you can hear the residents next door talking on their phone
or urinating in the toilet, your windows have water leaks or mould or
if there are parking problems, you will know this is not the place for
you.
On the other hand, if you like the apartment, your neighbours and the
area, you can purchase with confidence.
It's
cheaper
In the downtown core, there were 600 condo units rented out through the
MLS system in March 2013 and so far the rents have remained steady.
Here is, on the average, what your money gets you:
| $1,400 |
studios and
bachelors |
| $1,500 |
one bedroom
without parking or
den |
| $1,900 |
one bedroom plus
den and parking |
| $2,500-$3,000 |
two bedrooms |
| $4,000 |
three bedrooms |
Sure that is not cheap but once an "investor" has absorbed the down
payment, the occupancy costs, annual property taxes, monthly condo
fees, rental agent fees and maintenance on the unit he often finds that
the rent does not cover his costs and he is subsidizing the renter to
live in his condo.
If mortgage rates go up, if there are any special assessments, if the
condo fees go up or the refrigerator breaks down, the landlord absorbs
the costs.
Special assessments are always a possibility.
It was assumed that they only happened in older condos where the owners
neglected to properly fund the Reserves and maintain the property but
new condos can be plagued with construction defects and condo fees
which were artificially kept too low by the builder.
Special assessments costing tens of thousands per unit are not unheard
of. These are not a renter's problem; they are the owner's problem.
Think the owner will just raise your rent high enough to make a profit?
Well any increases are negotiable, are they not? As a renter, you have
the power to keep any rent increases within reason especially if you
are a good tenant who always paid your rent on time, didn't cause any
trouble with your neighbours, or the board, and kept the unit in great
shape.
The longer you rent the apartment, the more your landlord may be out of
pocket.
Renters
have rights
The Residential Tenancies Act gives tenants many rights and if the
landlord violates them, the renters can contact the Investigation and
Enforcement Unit (IEU) of the Ontario Ministry of Municipal Affairs
and Housing.
There are tenants' rights groups and tenants' associations that post
their rights on their websites, answer most common questions and are
glad to help.
Some conditions
apply
A
renter and the renter's guests must obey the provisions of the
Condominium Act and the corporation's declaration, by-laws and rules.
Make sure you get a copy of these documents from your landlord.
Make sure that you comply with the condo's rules about pets.
Some condo landlords do not include the unit's locker or parking space
in
the rent. They plan to use them for their own use or they rent them
to other residents.
There are landlords who expect you to share the unit's mailbox with you
and will keep a key so they can clean out their mail once or twice a
week. If you don't like having your landlord sorting through your mail,
let them know that you will be changing the lock on the mailbox. You
can put the old lock back on the mailbox when you leave.
Check the apartment carefully and note all pre-existing damage and
defects in the unit and have the owner verify, in writing, that they
exist.
Get all of this straight before you sign the lease.
Renting—the
down side
When you rent a unit in a traditional rental building, you can remain
in the unit as long as you keep up the rent payments. There are people
in Toronto who have happily lived in the same rental unit for over
thirty years.
However, when you rent a condo, you can be asked to leave
when your
lease expires. If the owner wants to move in,
you may have to move out with only 60 days notice.
However, chances are
there are several units for rent inside the same building you are
already in so you won't need a moving truck.
Ripoffs
Some landlords in Toronto's condos are demanding key deposits of up to
$500 and when the tenants move, the landlord changes the locks and
refuses to return the key deposit. Other tenants face huge rent
increases to cover increased maintenance fees.
Some owners demand a full six months rent in advance of a tenant moving
in. Newcomers to Canada pay up as they need an address and they do not
know their rights.
A few condo boards demand that tenants pay a fee, up to $150 to book
the elevator for a move while others charge $50-100 an hour for a
security
guard to monitor the move.
Be aware
Most
boards will not authorize repairs in a
rented unit that is the responsibility of the owner. Nor will they
assist renters with any issues they have with their landlords. The
condo management will only deal with the actual owners.
Rent controls
All
rental stock in Ontario, including condos, are now covered by rent
controls. That makes renting a condo even more attractive.
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