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Short Term Rentals in Short Supply

Today I was out with some clients who are looking for a short term rental downtown and I was reminded of something I’ve known for quite some time: Short term rental condos in Toronto are in very short supply.

Currently, as of writing, in all of C01 and C08 combined, there are only 39 available condos for short-term leases of less than 1 year priced under $3000/month on the MLS system. This compared to hundreds of condos available for lease with the traditional 12-month lease system. This is crazy! As a Realtor, finding a suitable short-term rental for clients is a very difficult task. The market is telling us something.

If you own a condo downtown and you have been renting it out as a traditional rental with 12-month leases, consider increasing your rental rate significantly and renting it out on a monthly or short-term basis. Also consider furnishing your unit and charging even more.

If you are an investor looking to get into the game, consider buying a unit for the purpose of renting it out as a short-term rental. 

Of course, as a landlord, the downside of having a short term rental is that the high turnover means you are constantly looking for new tenants. The upside is that you tend to get higher quality tenants and if your unit is vacant from time to time it doesn’t hurt your cash flow as much because your rates are higher. Hiring a property manager to handle the task of finding tenants is always an option as well.

Landlords: have any experience with short-term rentals? I’d love to hear your thoughts.

Renters: having trouble finding something in Toronto for less than a 1-year lease? I’d love to hear your stories.

Other thoughts or questions? Leave me a comment or email me.

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Can’t Sell Your Condo? In this Market, Consider Renting

If you have have tried to sell your condo anytime in the last few months, you know what the Toronto real estate market is like better than anyone. 

Condos in ‘hot’ buildings that a year ago would sell over asking in week are now languishing on the market for weeks. Price reductions are happening every day. Conditional offers are welcomed with open arms as opposed to being laughed at in the heady days of 2007 and early 2008.

The bottom line is that it is a tough market to be a seller. The pressure is on you to have an immaculate unit in a great location at an irresistible price. And even then, that is no guarantee of success. 

One option that you might want to consider if you find that you can’t sell your condo, is to rent it. The rental market is not that bad right now. Leases are being signed every day as some would-be buyers are deciding to rent for another year. After you rent out your condo, you’ve got to live somewhere, so what do you do?

If you are fortunate enough to be in a financial position to carry two mortgages, then you buy somewhere else and take advantage of the market. But if you are like most sellers, that is not an option, so might I suggest renting yourself. That’s right, a real estate agent is telling you to rent and not buy (queue the dropping of jaws).

This is just what one of my clients did recently. Their condo unfortunately did not sell in a timely manner and due to personal constraints, they had to move, they could not wait for the market. So they rented out their 1 bedroom condo for about $1600 per month and then found a suitable place themselves in another part of the city for about $1200 per month. So they are actually ‘clearing’ about $400 a month while still paying down their mortgage. Their plan is to wait a year, see if the market has improved, and then either sell, or continue to rent. Not bad option if you can make it work.

I always love to hear your feedback. Leave me a comment or contact me any time.

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