Who Is Going to Live in Your Condo and How Much Are They Going to Pay You in Rent?
[A very special episode!] Two common questions we get from new condo investors are “Who is going to live in all these condos that are being built?” and “Wow! Do people really pay that much in rent to live in a condo downtown?”. Find out who does live in these condos and how much they are paying in rent in today’s episode as Andrew la Fleur interviews a real life condo renter – his sister!
JOANNA LA FLEUR INTERVIEW HIGHLIGHTS
2:10 The market, and the case for investing in larger units, is growing.
3:57 What it’s like to be a renter in the city?
4:25 Why do you live downtown?
6:03 Realization you came to when thinking through your options of living in the GTA.
7:13 Everything changes if you’re talking about sharing your rent.
8:48 What’s your living situation? why did you decide to move?
11:25 You’re getting one roommate, not two, and the rent for that is about how much?
14:00 You still have everything, but yet your monthly cost is about the same?
15:03 Growth and the potential of these 3 bedroom condos from an investor perspective.
17:50 A lot of people are wondering do I need a parking spot with my condos?
20:17 What are the main things come to mind when you think of your criteria for a place?
Andrew la Fleur: On today’s episode I interview my sister. That’s right, my sister. Find out why, next.
Speaker 2: Welcome to the true condos podcast with Andrew la Fleur. The place to get the truth on the Toronto condo market, and condo investing in Toronto.
Andrew la Fleur: Welcome back to the show. As I said in the intro, on today’s episode I am actually interviewing my sister. Yes, my sister. You might be surprised by that. She’s not in real estate or anything like that, but the reason I want to interview her is because she is a young professional who is renting a condo downtown.
What I find with a lot of the typical condo investors out there that I work with is that, number one, most condo investors do not rent, and they probably haven’t rented for many years, or perhaps ever. And the second thing is that they don’t tend to live downtown. Maybe this is describing you accurately as you’re listening to this podcast: You’re not renting, you haven’t rented for many years, and you don’t live in the core in the downtown of the city. So there’s a certain detachment from your customer, your client, the end user of the product that you’re buying.
Partly, I wanted to interview my sister as an example of someone who is your customer, who is your current or future customer, if you’re new to investing, to understand their thought processes and understand what they’re looking for in a rental unit.
But also wanted to continue to build the case for larger units, specifically two and three bedroom, larger condos. I believe that there’s growing evidence, and the growing case to be made for investing in larger units, not just smaller units, which is what we typically have done in the past few years, and we’ve done very well with. We’ll continue to do very well with smaller units, of course, but the market, and the case for investing in larger units, is growing.
I wanted to talk about that, and we’ll explain the connection to larger units and my sister as we get into the interview. So without further ado, let’s jump into my interview with my sister. Here we go.
All right. It’s my pleasure to welcome to the show a very special guest, my sister, Joanna la Fleur. My sister, Joanna la Fleur, is our special guest today on the show, and you’ll find out why we’re talking to her in a moment. Joanna, welcome to the show.
Joanna la Fleur: Thanks. Thanks for having me.
Andrew la Fleur: Glad to have you here. Why don’t you start by telling everybody a little bit about yourself and what you do for a living, and any other details you want to share.
Joanna la Fleur: Yeah, sure. I am a single 31-year-old. I live downtown Toronto, and I work as a communications director in a non-profit organization in the suburbs. I actually live in Toronto, in Regent Park, right now, and I work in Ajax, which is maybe one of the more unusual things about me. I have lived in the city for the last many years, while commuting a number of days a week out to the suburbs.
Andrew la Fleur: Great. I want to talk about your move that you’re doing, and we’ll get to that in a minute. So you’ve been living downtown, you’re renting a condo. A lot of people who are listening are condo investors, or are thinking about investing in condos.
What I find is a lot of people have a hard time, especially those who don’t live in the city, sort of wrapping their heads around what it’s like to be a renter in the city. Who’s going to rent this condo from me? What type of people are living and renting downtown? They see all the cranes going up, they see the towers everywhere, but they don’t understand. Who are all these people filling them up?
I wanted to chat with you about that, and just your experience of being a person who’s a working professional, who’s living and renting downtown. I also want to get into your move, and the reasons behind that. Let’s start with why do you live downtown? You work in the city. You could, obviously, live close to where you work in the suburbs, but you choose to live downtown and rent a condo. Why do you live downtown? What do you like about living downtown?
Joanna la Fleur: I think the suburbs are great if you have a family, but as a single person, or maybe as couples without children, the suburbs don’t have as much to offer in terms of nightlife, and restaurants, and arts events, and especially, also, where your friend group tends to be. That’s a big pull for a single person is where your community of friends also are.
I also spend a lot of time in my life in Europe, so I’ve been kind of heavily influenced by European lifestyles, which tend to be more urban, more walkable lifestyles, and really, just smaller homes, where you’re more out of your home than you are in it.
I just felt that living in the city, where I could step outside my door, walk to a coffee shop, go over to the baseball games in the summer, meet up with friends after work, all that kind of stuff, was a better fit for me than the previous few years, where I’d been living in the suburbs with a lot of families and, you know, people taking their children to soccer practice and all of that. Which is great, but just not what I’m doing with my life.
Andrew la Fleur: You made a great point just before we started recording. Sort of maybe a realization you came to when you were thinking through your options of where to live in the GTA. Maybe you could just tell everybody what that was.
Joanna la Fleur: I moved to the GTA from the Kitchener-Waterloo region about seven years ago and, to my surprise, the cost of rent in Toronto proper, and then in the surrounding suburbs, was virtually the same in terms of dollar amount. Now what you get for your dollar in the suburbs is you get more square footage. You might even get a back yard, or something like that.
But as a person with my lifestyle, my stage of life, those things weren’t as important to me. In the city, I’m going to pay the exact same amount of money per month in my rent. It just means that my square footage is smaller, so you have to just be a bit more creative with the type of furniture you buy, and how much junk you collect.
Andrew la Fleur: Right. Do you have a concrete example? Like, if you’re renting something in the ‘burbs versus something downtown? What does it cost and what do you get?
Joanna la Fleur: Everything changes if you’re talking about sharing your rent with a partner, or with roommates, or things like that. But if you’re looking to rent a place by yourself, the rent in the Ajax-Pickering-Whitby-Oshowa area was easily, if you wanted something above ground, which I would be looking for, I don’t want to live in a basement, you’re easily looking at 1,500, 1,600, $1,700 a month for a home.
In the city I could probably get that same price or even a little bit less, it just means that I’m not having as much square footage. For me, it was a no-brainer that I cared more about the location than I did about the size of the space, because I don’t have five dogs, I don’t have a bunch of children that I need to think about finding the space for. As a single person, the priority to me was location, not square footage.
Andrew la Fleur: Right. It’s sort of a no-brainer, I guess, at that point for, I would think, most people who are single and professional. If you’re going to pay the same amount, you might as well be downtown. Right?
Joanna la Fleur: Right.
Andrew la Fleur: You might as well be where most of your friends probably already are, and be in the center of the action, for lack of a better term.
Joanna la Fleur: Yeah, exactly.
Andrew la Fleur: That’s really interesting. I think a lot of people who are new to investing, especially, will find that insight very helpful as they’re thinking this through.
Let’s talk about your move. Tell us a little bit about your current situation. What’s your living situation, and then you’ve decided to make a move, and so what is your new situation going to be, and why did you decide to do this?
Joanna la Fleur: Yeah. My current situation is I’m in a studio apartment in Regent Park area, it’s one of these new condo builds that have gone up. I live in 350 square feet. What this means is with 350 square feet you have a few limited choices. You either have a loft bed, some sort of mobile furniture like a Murphy bed or something like that, or your entire space is, basically, just a bedroom. Because I like to have people over, I went for the loft bed option so that raised my bed up. I’ve really enjoyed the studio space for the last few years, and the building has been great.
You know, the irony is I had a big party to celebrate an event in my life about a year ago, and I had one of the largest parties I’ve ever had. Maybe about 100 people were there. And it’s also the time where I’ve lived in the smallest space, 350 square feet, because we have the access to amenities and shared space downstairs. So it’s been a bit of a shift in my thinking of how you live, like where your home is, maybe where you used to just have a couple friends over, and the shared amenities is where I’m able to host for something like a special event like a party, or a birthday, or things like that.
So anyways, I’ve been looking at the housing market, and recognizing the speed at which it’s becoming unattainable for me right now in my life. I just came to recognize that I’m going to be renting, I think, for a while, so I needed to begin looking at getting more space. Specifically, that my bed is in a loft and I wanted to move to where it’s a bed on the ground. After two years of living in a loft bed, I thought that was enough of that.
Also, I wanted more space to host people in my own home without having to use the amenity space in the building. So I’m moving from being by myself in 350 square feet to sharing a three bedroom, two bathroom condo with another friend.
Andrew la Fleur: So you’re going from about 350 square feet of your own place, a studio …
Joanna la Fleur: Right.
Andrew la Fleur: … to, how big is your new one? I think it’s around 1,000 square feet?
Joanna la Fleur: Yeah, 1,050. Probably the 50 is counting the balcony, I would guess, so it’s about 1,000 square feet.
Andrew la Fleur: About 1,000 square feet, three bedroom, two bathroom …
Joanna la Fleur: Right.
Andrew la Fleur: … and you’re getting a roommate.
Joanna la Fleur: Right.
Andrew la Fleur: You’re getting one roommate, not two, and the rent for that is about how much?
Joanna la Fleur: Well for me, the cost per month is going to be about the same. With all my expenses in a studio it works out to around 1,500 bucks a month, a little more, depending on utilities and all the rest, and if you have parking for your car. And then moving to this three bedroom place that I’m sharing with someone else, the monthly costs are going to, for me, work out to about the same because we’re sharing it 50/50.
But what it’s allowing me to do is, I continue to have my own bathroom, I now get a proper bedroom with a door versus the studio where it’s all open, and then the added bonus is that we’re going to have a guest room, which will allow my parents to come in and visit, or other friends and guests from out of town, or just even have office space to work from home.
Andrew la Fleur: Right. Do you work from home?
Joanna la Fleur: I do. I commute out to the suburbs three or four days a week, and I work from home one to two days of the week.
Andrew la Fleur: Right. Would you say that’s fairly common? Do a lot of your friends? Or is that-
Joanna la Fleur: Yeah.
Andrew la Fleur: … like people, sort of young, professional, similar age and similar stage of their career, are more and more people working from home like that?
Joanna la Fleur: Yeah. I mean, I’m finding more and more of my friends seem to have jobs where you do have to go to the office sometimes, unless they’re working for themselves. They do have an office, but there’s some flexibility to how often they need to go there. I think we all know that sometimes an office can be more of a place of distraction than actual work, so it’s nice to be able to work home, sometimes, to get certain types of stuff done that doesn’t require meeting with other people.
Andrew la Fleur: Right. Okay. So if I can just recap, basically, you’re going from your own apartment, a studio, 350 square feet, to a three bedroom, two bathroom apartment, where you’re going to be sharing with one other roommate. And then you have an extra guest room for office, or just extra space for when people come over or whatever.
Joanna la Fleur: Yeah.
Andrew la Fleur: You’re also gaining, I guess, a large living space to have people over, where you have a bedroom where you can shut your door, as opposed to a studio, which is just one open room.
Joanna la Fleur: Yeah.
Andrew la Fleur: So you’re gaining quite a bit.
Joanna la Fleur: Right.
Andrew la Fleur: You still have your own bathroom and everything, but yet your monthly cost is about the same.
Joanna la Fleur: Yeah. And that was really, for me, the decision maker, when I recognized that I would be renting for a lot longer, this opportunity to move into a three bedroom, two bath, and then share it, and realizing that the monthly expenses would be about the same as living in a studio by myself.
I felt that it was, as a person who I foresee renting for a long time because of the way that the market is … I make an average amount of money. I make more than some of my friends, I make less than some of my friends. I think I’m an average earner. It’s just going to allow me, in a market that’s so above average in cost, for me, to live more sustainably and happily for the years to come.
Andrew la Fleur: Right. You know, it’s very interesting because one of the things we’ve talked a lot about in the podcast lately is the growth and the potential of these three bedroom condos from an investor perspective.
One of the big questions a lot of people ask is just who is going to rent a three bedroom condo. Are there really people out there who are going to do that? Who’s going to pay $3,000 or more per month? What would you say to people like that, who maybe are not as familiar with the rental market, the reality of the rental market right now? What would you say to people like that, who are thinking they just can’t wrap their head around these kind of $3,000 a month rents?
Joanna la Fleur: I think the most obvious person to rent it would be a family. I mean, these days, because the housing market for a three bedroom home is a million plus, 1.5, it wouldn’t be hard to spend $1.5 million on a home, a three bedroom home, these days in the closer end of the city. A lot of families are looking at those, I think, as alternatives.
And again, when you look at the price of rent in the suburbs, you will have more square footage for a family renting in the suburbs, but the prices of homes there feel just as unattainable to a lot of families.
Then you look at, hey, might as well live where I work. I get home earlier. I get to see my kids earlier. And then the city really becomes your home. There’s all kinds of opportunity. I mean, the neighborhood I live in now, there’s all kinds of stuff going on for families with free events, and free swimming, and sports classes, and festivals in the summer, and family movie nights in the park, and all kinds of things that families can tap into, that may be less available in the suburban home that you’re paying the same amount to rent.
Andrew la Fleur: And you can walk to all this stuff, too. Correct?
Joanna la Fleur: That’s it, yeah. Then it reduces, you’re probably not going to need two vehicles for your family, and all that kind of stuff that starts to happen.
I mean, the second, obviously, is people like me, who are probably professionals and are, for whatever reason, not wanting or not able to purchase property, but it’s not necessarily student rentals, or things like that. There are a lot of people who are like me, in their late 20s and into their 30s, who are renting still, and, like me, are looking maybe to rent with one other person, or whatever. They work all day, and they come home and want a great spot to land at night.
Andrew la Fleur: Let’s talk about cars.
Joanna la Fleur: Yeah.
Andrew la Fleur: Obviously you work in the suburbs, so you have a car.
Joanna la Fleur: Right.
Andrew la Fleur: With your friends, and people that you hang out with downtown that are living and renting downtown … A lot of people are wondering do I need a parking spot with my condos … how many people have cars, who doesn’t have them, or whatever?
Joanna la Fleur: I own a car. I work in Ajax, so I need one. But when I’m in and around the city I try not to use it much. I Uber a lot, or I take the streetcar sometimes, where I need to go.
A lot of my friends, I would say if they’re single people, whether they’re living by themself or living with others, they typically don’t own cars if they live and work in the city. A few people I know use carshare programs if they need a car, or they rent a car a few times a year for a big trip up to a cottage or something. I find a lot of couples tend to have cars, they share a vehicle between them.
In the unit I’m in now, it didn’t come with parking so I just rent a spot from somebody else who owns it within the building. It’s not really an issue. It wasn’t a hindrance at all to find a spot.
Andrew la Fleur: Right. But if your job was downtown, or if you ever changed jobs and you were working downtown, do you think you’d keep the car?
Joanna la Fleur: Yeah. If I didn’t have to own a car, I wouldn’t own a car. As I said, if I was in the city and working in the city, I would probably take transit, or bike, or Uber everywhere I need to go.
And then the few times that you do need a vehicle, maybe for a weekend trip, or some mega-trip to Costco, or something like that, there’s lots of options for renting a car, borrowing a car from a friend, or the carshare programs that are all over the city, where you have a membership and you pick up a car as you need it. That’s probably what I would do. I mean, a car is a huge expense I’d like to get rid of.
Andrew la Fleur: Yeah, absolutely. If you get rid of that it frees up so much money for …
Joanna la Fleur: Yeah.
Andrew la Fleur: … a million other things. It’s been great chatting with you, Joanna. Just the last question is when you are looking for a place to live, other than the price, what are the top things that you really consider as a renter today as you’re considering looking at one building or another, one unit or another? What are the main things that come to mind when you think of your criteria for a place?
Joanna la Fleur: Obviously, location is the number one thing that most people would probably say. What is walkable, for me, is a big question. What can I step outside my door and, within a reasonable amount of time, walk to, whether that’s food, and restaurants, and coffee, and grocery, and things like that. Or just the, sort of, the life of the city, that would be a big one.
I’m looking for how new is it. Is this a run-down place, or is it in really great condition? I have many times moved into apartments, and I’m the first one to live in that place, and I love that opportunity.
Another thing for me as a single woman is I’m really appreciating that a building has a concierge or a security service downstairs. What’s the safety in the building? That’s a factor for me that I want to take into consideration as a renter. I like to know that somebody is watching who’s coming and going from a building.
Andrew la Fleur: That’s great. Thanks a lot, Joanna. I appreciate your time today. It’s great chatting with you. If somebody wants to get a hold of you, or reach you, or find you online, what’s the best place to find you?
Joanna la Fleur: If you want to see what my life looks like here in my condo life in Toronto, or you want to connect with me, probably just my Instagram is joannalafleur, or joannalafleur.com
Andrew la Fleur: Great, awesome. Thanks, Joanna.
Joanna la Fleur: All right, thanks. Okay, bye.
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