How Many Toronto Property Owners are Leaving Homes Vacant Due to the Fear of Being a Landlord?
An acquaintance of mine has a condo that she bought before she got married. Instead of selling when she bought a home with her husband, she has rented to various tenants over the years. Recently, she posted on Facebook that she would rather let the condo stay empty than rent it out to anyone again after bad experiences with tenants.
That got me wondering how many potential rental units are off the market due to the chilling effect of either having had a bad experience with a tenant or being afraid of such an event. Toronto’s recent vacant home tax tally gives us the answer as to how many homes are lying vacant in 2023: around 11,600.* In 2022, one in ten of Toronto properties were vacant – a fact that led to the establishment of the Vacant Home Tax, a measure designed to strongarm property owners into becoming landlords or selling.
These are properties that are not being used as short-term rentals or anything at all. It’s understandable that homeowners don’t want to list their properties as short-term rentals; the wear-and-tear for a short-term rental is much higher than wear-and-tear from a long-term tenant. But why not a long-term tenant?
Why are Toronto properties sitting empty?
Usually there’s an answer for everything. But in all the articles and policy papers about vacant homes, nobody has put forward a reasonable answer as to why Toronto landlords are leaving properties vacant. According to the Financial Post, the majority of these properties are in apartment buildings or duplexes. Apartment buildings are almost always owned by corporations, although some of those units are condos which could be owned by a small landlord like my friend. A duplex may also be owned by a smaller landlord.
The Financial Post article also states that the difference between a “vacant” home and an “unoccupied” one is massive, and the data the government is relying on to estimate these numbers has some people using the wrong category. However, we now have the updated data from the City of Toronto, which may or may not suffer from the same miscategorization. Either way, a significant number of units are out of housing inventory in Toronto and we don’t know why. This leaves open the possibility that people simply don’t want to be landlords, which isn’t entirely out of line considering delays at the LTB for problem tenants and the day-to-day work that goes into the business of renting.
A property management company is the answer
Whether a property owner is foreign or domestic, they will make more money from their property by renting it. If the fear is excessive wear-and-tear or damages, these can be mitigated by proper tenant screening and ongoing repairs and maintenance – both of which we provide as a property management company. There is an advantage to having a middleman in that we are contracted as a business to manage your relationship with the tenant.
That means that you are less likely to be taken advantage of by a tenant, and on the flip side we are proactive about everything that tenant might need. We believe that great tenant relationships are the “secret sauce” in ensuring that your property remains undamaged and rental income keeps flowing, but only after we’ve screened those tenants meticulously for you.
Another objection people have to property managers is that they would eat up a significant amount of margin on profit. We’re more affordable than you would think, and certainly more affordable than leaving a unit empty.
If you have a vacant property in Toronto, consider hiring us instead of letting your investment languish without making you any money beyond what you may make when you sell it. Create another income stream for yourself and help alleviate Toronto’s housing crisis – everyone wins!
*Number calculated as 20% of 58,000 properties; the City of Toronto estimates that 80% of the 58,000 properties listed as vacant through failure to file a Vacant Home Tax declaration for 2023 are actually occupied.
