Thinking about purchasing an investment property to rent? If so, now might be the time.
Last week TREB (Toronto Real Estate Board) released a report on the Toronto Rental market, showing that the rental market is continuing to tighten, thus leading to higher rents. According to the report the number of apartment lease transactions through the MLS system from May to August were up 11% over 2010, with the percentage of listings leased jumping from 62% in 2010 to 67% in 2011. Many of the offerings are condos turned into rentals by investors, according to the TREB report.
So why the change? The rental market has seemingly been the same for a very long time with rents staying at or around the same level for a number of years so what has the impetus been? Certainly there are numerous factors including:
1. According to RealNet Canada Inc. between 80,000 to 100,000 newcomers arrive in the GTA every year.
2. With all the construction that has been happening in the high rise sector very little of it has been built for rental purposes. As TREB President Richard Silver said, “Condominium apartments represent a very important component of the rental housing stock in the GTA. We have seen very little purpose-built rental apartment construction over the past few years.”
3. 49% of Toronto’s households are renters; for the last 35 years, the split has been about 50% renters and 50% owners.*
4. Toronto’s population will continue to grow.
5. Though rental vacancy rates have been in the moderate range for the last 3 years (3.7% to 4.3%), they have started to decline again. For the previous 30 years, vacancy rates were persistently low, often below 1%.*
So if you're thinking about becoming a Landlord, now might be the time!
*statistics published by Toronto City Planning Policy & Research