Holiday season is when industry forecasters look into their crystal balls and try to predict what’s coming round the corner. For the 2024 Toronto rental market, the outlook isn’t great.
Landlords are finding it harder to get tenants, according to a recent report, which indicates we’re entering a cooler market after several years of unprecedented growth. Demand is down and inventory is up, leading landlords to drop prices and offer incentives to catch the attention of prospective renters.
The annual rate of rent inflation in Toronto dropped 0.8% in October, marking the first decrease since August 2021. Month-over-month rent growth is also slowing with a 0.2% increase in average rent between September and October compared to 1.5% the previous month.
Should landlords panic?
In short, no. This downturn is to be expected after the atypical upswing seen in recent years. Coming down from those dizzying heights was inevitable and the resulting cooling will likely be a gradual, long-term decline to a more normal market.
This means landlords are essentially back to business as usual. If you’re worried about keeping your unit occupied, there’s no need to lower rents (unless you’re overpriced for your neighbourhood). Instead, keep it simple. Focus on being a good landlord – looking after your property and your tenants.
If you’ve let things slide a bit during the boom years, now’s the time to address those issues and double down on providing the best service possible. It might be a more competitive market, but the same principles for getting and keeping good tenants apply.
Property management
In a hot rental market, many landlords do the minimum knowing that tenants have little choice. Those landlords won’t get away with that tactic as the market cools.
The Residential Tenancies Act requires landlords to keep their units in ‘a good state of repair’. Bad landlords interpret this provision as narrowly as possible. Good landlords go above and beyond.
Do regular maintenance, respond to emergencies promptly, and let your tenants know that you can be contacted if they have any concerns. Don’t ignore seemingly insignificant jobs like peeling paint or broken screen doors, be responsive and efficient to all issues, big or small. This proactive attitude will help you attract good quality tenants who want to stick around.
Tenant management
Just because conditions have shifted in favour of tenants, doesn’t mean screening isn’t important. You need good tenants in any market and doing your due diligence increases the chances of finding someone who is a good fit for your property.
When vetting tenants, it’s a good idea to ask for employment history, credit checks, and references, as well as an in-person interview. Make sure you’re signing a lease with someone you can communicate well with and build a long-term, mutually respectful, relationship.
Get expert help
Picking good tenants and making sure you’re on top of repairs isn’t as easy as it seems in unpredictable markets, especially for first-timers or inexperienced landlords.
Working with a property management company can help landlords ride the trends to maximize their profits. These experienced real estate professionals can give you expert advice on whether you should consider dropping your rent and the best time to do so, the areas you need to address to find better tenants, and how to achieve your long-term investment goals.
They can also help guide you through the tenant vetting process and take responsibility for ongoing property maintenance and last-minute repairs, drawing on their long list of contacts to ensure you can find the right tradespeople at the right time.
Highgate Property Management offers these services and more. Our knowledgeable and friendly team takes care of everything, from tenant screening to rent collection, and maintenance to dispute resolution. We’ve helped hundreds of landlords across the GTA make the most of their properties and protect their investment through turbulent times. Get in touch today to make an appointment or find out more.
