The art of renting

by Darrin DeRoches August 27 - September 5, 2009

In real estate everyone is concerned about the buying and selling of property, but many agents also handle the renting of property. There is definitely an art to renting. A landlord may use an agent to show the property for a variety of different reasons, but what really makes someone the right fit for an apartment? The rental market is very large in the Hamilton–Burlington Area; back in 2003 it was about 30 per cent, but I read somewhere it is now nearly 40 per cent of the market. That is a pretty large segment of the market, and the vacancy rates have gone down to about 3.2 per cent. If you look at the average cost for a two bedroom it is about $885 in Hamilton, $895 in Guelph and there is nearly a 7.9 per cent vacancy in St. Catharines rental market. In comparison to the big Toronto, they average about $1095 in rent and have nearly 58 per cent in rentals with a low 2.4 per cent vacancy rate. So if you were looking to make an investment in rentals you can go to Toronto, but their numbers are a little skewed since they have a ton of condos being built and rented so they are seeing a little lower rent and probably a higher percentage of vacancy than is reported. So once again, the Hamilton–Burlington or Guelph–Waterloo areas are the best place to put your money for an investment property. The St. Catharines – Niagara area is still being hit hard and although you may get a great deal on a home, the rents you can demand and the competition for tenants make it pretty risky. The biggest obstacle for a landlord is finding a tenant who will pay on time and take pride in their property. When renting you usually meets for a short time, fill out a simple application and then the landlord may check references and take a leap of faith and rent you the apartment. If a landlord uses an agent to do their showings they can get a bigger picture of their prospective tenant. An agent can ask more questions, do a credit check, call references, call past landlords, check out the potential tenants’ jobs and give a second opinion on the applicants. When an agent makes these inquires, people tend to be more open and forthcoming then if a landlord calls. The agent is a neutral person who is used to dealing with people and their real estate needs. They know what questions to ask and they have heard all the same answers which can raise the red flags. The cost for using an agent in renting a property is usually one and a half months’ rent. This payment may seem low for and agent and may be high for the landlord, but the agent can meet perspective clients who are renting now and will buy in the future and the landlord will receive a more qualified tenant, a second opinion and a tenant who will likely stay longer and pay their rent. Some times the “arm’s length” transaction from the landlord to the tenant is worth more than a months rent, in the long run. V [DARRIN DEROCHES] Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.