Hot Toronto Rental Market Takes Real Estate Agents By Surprise

Written By: Connie Adair
Sunday, October 9, 2016

Its not only the housing market thats hot, and the job market thats competitive. In the Greater Toronto Area, rental properties are seeing multiple offers. For would-be tenants, the experience is not unlike applying for a job, as they hope to be selected from a pool of qualified applicants.Its also not unlike going into a multiple offer situation when buying a house.

"Last year we could put an apartment on the Multiple Listing Service. Regardless of price point, in two or three weeks, a few people would view it and wed get one application," says real estate agent Sue Anfang of Keller Williams Realty in Toronto. Anfang specializes in residential real estate purchase and sales, some investment properties and residential leasing. She has been in the business for 10 years.

Now, in a turn of events thats catching Toronto real estate agents by surprise, rental properties are attracting multiple people. In the last year, good places priced right are getting more than their share of attention.

Anfangs recent downtown condo lease had 40 showings in two days and rented for more than the 1,750 asking price.

But the market isnt just hot downtown. Her listing for a "smallish basement apartment" in Scarborough, a Toronto suburb, was listed for 920 per month. It was very clean and bright, unusual for a basement, and it had 20 showings in one week and resulted in five good applicants, she says.

"Its happening downtown, in North York, Markham and Richmond Hill too," says real estate agent Susan Chen of Century 21 Kings Quay Inc. She has been a sales rep for four years, helping clients buy and sell, but she also helps international students find rentals.

The big indicator of a changing trend is that real estate agents were doing most of the showings. Having agents involved in high end rentals isnt unusual, but theyre getting involved at every price point as desperate tenants approach agents to see how to win in multiple offers, Anfang says.

On the other side of the table, landlords who want better quality tenants and dont feel confident in doing the search themselves are calling on real estate agents to help, she says.

Real estate agents go through the applications, check references and do credit checks. Landlords are then given their pick of a litter of highly qualified tenants. She says "landlords are, in a sense, hiring."

Doing rentals is a lot of work for agents about the same amount as when helping people buy or sell and the compensation is not high. "You might get a half-months rent for doing it. For a basement apartment, that could be a couple hundred dollars," she says.

The hot real estate market is partially to blame for the frenzy. Some homeowners are cashing in on their homes in the suburbs and moving downtown to be closer to work and cut their commute. Because of lack of inventory, as well as high prices, they decided to rent instead.

As with the housing market, multiple offers can bring out the aggressive. Anfang had an agent calling at 11:30 pm, asking what they could do to get the condo unit for their client.

Anfang, who often works for the landlords, offers these tips:

Dont start looking until you have given notice. I need to know you will be able to take the rental when the landlord wants occupancy. If representing the landlord, I want to know that youve given notice.

Have your references lined up. Fill out the rental application and take it to the showing. Make sure your references know they may be getting calls. References from past landlords are best.

Have your income verification ready. It sometimes takes time to get a copy, so request one in advance of your apartment search.

Do a credit check on yourself. Equifax will cost about 20. If you request a free version, it will be sent by snail mail, which will take time so take that into account.

Google yourself to see what comes up. A landlord may check you out so it will pay to see what theyll see.

Have a Plan B -- line up a temporary residence an Airbnb or arrange to stay with family or friends because you dont want to be without a place to live.

You may have to settle for neighbourhoods outside of the downtown core. Remember, rentals that are closer to good transit options and highways are more in demand because people want to be close to work and amenities, Anfang says.

Landlords tend to choose tenants who are the best fit, often people who are quiet and who they dont think will put a lot of wear and tear on the property. They look for someone who is responsible and employed.

But even for a professional who is making good money, its not a given that they will get the unit in a multiple offers situation.

For students the competition is even stiffer and they have to sweeten the deal. Agent Susan Chen says summer is always a busy time with students looking to rent. She says there are fewer units for lease this year compared to last.

To find a rental in North York, another Toronto suburb, she had to put one students application in three times. Landlords prefer someone who has a job, Chen says. There are more potential tenants -- this year she has seen seven or eight competitive offers on rental properties. She says one deal in August drew more than 10 offers.

But there are things students can do to get the landlords attention. "They may have to go up a little in price, or be willing to take a longer lease," she says. It was Chens client who offered to pay 50 more per month on Anfangs downtown condo lease and ended up with the unit.

Another tactic is to offer one year of rent upfront. "International students dont have a guarantor and it may be the only way to get the landlord to choose them," Chen says.

Connie Adair is a Toronto-based freelance writer who covers real estate and design, and has co-authored a book, Crack in the Armor, about police and post-traumatic stress disorder. Email .