In August, 2020, BNN Bloomberg reported that the pandemic had turned Toronto’s rental market upside down, handing power over to tenants and allowing new renters the opportunity to ask for more perks while negotiating for lower prices. The rental market is flooded, as many individuals have decided to move in with family members to reduce costs, and as sharp reductions in travel have forced formerly profitable Airbnb rentals to return to the long-term let market.
With a second wave looming, what’s an already overburdened landlord to do?
Landlords hoping to find new tenants? Make your property shine.
For years now, Toronto’s rental landscape has placed landlords at an advantage. Now that prospective tenants are spoiled for choice, they have the opportunity to shop around, with an eye toward spaces that stand out from the rest. William Blake, an active landlord and member of the Ontario Landlords Association told BNN Bloomberg that he has lowered rents and upgraded appliances in his units to draw in tenants.
“Tenants now have higher expectations,” he said. “They can shop around, so landlords have to take that extra step to make their place stand out.”
Blake went on to note that “The professional landlords who take being a landlord very, very seriously, like myself, we’re still doing very well. The turbulence is fine. But it’s the amateur landlords who thought ‘Oh, this is just an investment. I don’t have to work at all. I just put people in and collect the rent.’ These are the people who are going to be having a hard time during this period.”
Be available to existing tenants.
Property maintenance, prompt service, and timely repairs can make all the difference when it comes to building long-term, meaningful relationships with tenants, says Sabine Ghali, Managing Director of residential property management Buttonwood.
When landlords are at risk of being overwhelmed by a sea of demands, companies that provide property management services can turn the tide, catering to tenants at a moment’s notice and simultaneously preventing minor issues such as plumbing leaks into major, costly catastrophes. So long as there’s someone to call for maintenance, repairs, and even day-to-day business concerns (including touchy subjects like tenant disputes) renters are likely to appreciate the service and count it among the reasons to stay put.
Practical matters count: Use caution and show concern.
Virtual property tours for prospective tenants, online agreements, and other safety measures make cautious landlords stand out. People appreciate it when professionals – landlords included – take careful social distancing measures that keep everyone safer. So mask up, have masks on hand for anyone who might have forgotten one during an in-person property tour or meeting, and have plenty of hand sanitizer at the ready.
Landlords with common areas to maintain should remain vigilant, taking steps to keep tenants safe.
An article in Toronto Storeys quotes Tony Irwin, president and CEO of the Federation of Rental-housing providers of Ontario. He stresses the importance of maintaining safety protocols that were implemented earlier in 2020, including sanitizing common areas, and requiring people to wear masks while traveling through common spaces such as hallways in buildings.
Brace for more rent freezes.
Irwin agrees that the pandemic has (and will continue to) extract a heavy toll, forcing landlords to offer incentives to fill vacant units and even decrease rents, particularly in areas where there were heavy student populations or tenants chose to leave.
Furthermore, Ontario has passed legislation to freeze rent for 2021, maintaining 2020 prices. Government assistance may be adversely impacted as the second wave of the pandemic crashes into Toronto, forcing landlords to delay improvements and tighten their belts even further.
Many landlords are between a rock and hard place, opting to keep tenants who can’t pay rent in place as recommended by the City of Toronto. Guidance from the city states that “All property owners are strongly urged to find ways to help tenants to stay in their homes. The city encourages landlords and tenants to proactively communicate about their situations and establish fair arrangements, including deferring their rent or other payment arrangements (such as allowing tenants to use their last month rent cheque cover payment.”
Landlords are encouraged to familiarize needy tenants – especially those who can’t work or are placed in the position of self-isolating – with Toronto’s financial support benefits. These resources can help funds go further and ease some of the financial stress that affects these tenants and by extension, their landlords.
Doing well? It’s a buyer’s market.
A segment of Toronto’s landlords continue to thrive and even when a second wave is in full swing, property prices are likely to decrease by up to ten percent, creating a buyer’s market, but not causing an all-out real estate collapse.
With a rebound sure to happen after a second or even third wave of COVID-19 makes its way through Toronto, landlords and investors who aren’t feeling budget constraints might do well to add to their portfolios and rent or re-sell properties when it’s advantageous. Supply chains have been disrupted, new building projects are stalling, and people with stable incomes are still looking for homes.
There’s no doubt about it: The rental market has taken a hit and as the second wave approaches, everyone needs to take steps to weather the storm. Once it’s over, the rental market will rebound – but it’s likely to take time.