Living in the most expensive city in Canada has set many people back a few years when it comes to buying a home. And Toronto’s market is searingly more difficult for first-time home-buyers. Even surrounding areas, once seen as viable first-time homeowner territory, are becoming more and more unaffordable.
Sure, I’m a realtor, so I’m exposed to this every day. But we also hear it every day on the news.
What were once considered high-paying salaries are barely enough to make ends meet. So imagine the challenges for Millennials, if people who are already well established in their careers struggle to make it work.
This leaves Millennials with one option: Rent.
Almost daily, I get asked by someone if I can find them a rental. This is a perfectly acceptable ask. However, balancing their expectations with our current market can be a challenging request. And the reality of it isn’t an easy one.
For starters, the average one-bedroom downtown will run you around $1900 to $2000. If I had a nickel for every time someone says, “Well, my friend got this one-bedroom downtown three years ago for $1500 …” I could rent one of my own places — and have a second place to live.
Of course, our housing market affects rental rates.
The more landlords pay for the property, the higher their mortgage. And as it becomes harder to buy a home, more and more people turn to rentals.
There is really no limit to what a landlord can charge for a place — once vacant. Now, with the demand for rentals at an all-time high, many landlords get to enjoy historical rental rates throughout Toronto.
So what are the solutions for renters?
Download Tinder and irresponsibly rush into a serious relationship just so you can split the cost of a one-bedroom.
Kidding. (Let’s be real, usually, people don’t even text back after the first date.)
In all seriousness, those in relationships are at the biggest advantage in the rental market, because the overall cost for a one-bedroom condo is significantly cheaper than larger options. This generally allows couples to splurge on a bigger, nicer place.
Now, let’s say you are single and loving life: $2000 a month is a hefty amount for an individual to carry. And there is no shame in saying you cannot afford that. In fact, as a professional, I push my clients to spend as little as possible.
There is no logical reason for anyone to spend an entire paycheque on a rental.
The more money you pay into rent, the longer you will be forced to stay a renter. Plus, you won’t be able to enjoy a life on the other side of your unit’s door!
My key recommendation to Millennials? Find a friend and rent a two-bedroom.
Now, this option has its benefits and its liabilities.
Generally, the more bedrooms you have the larger the kitchen and living areas will be. (See! There are advantages to not being in love and having to share that one-bedroom with a significant other.)
You can score a two-bedroom in the downtown core between $2600 to $2800. Newer buildings often have drastic size differences between masters and secondary bedrooms. So, whoever takes the larger space takes on a larger portion of rent.
This has become the most common practice in the market — and can save you hundreds of dollars on a monthly basis.
Of course, renting is not always a simple solution. Just like those house-buying bidding wars that make the news, you will also find rental bidding wars. So be prepared.
In a city like Toronto where real estate prices are high and/or on the rise, buying a home seems more and more impossible every day.
A lease, however, is a low-risk one-year commitment. If you’re not happy, it’s just a year. And the experience will teach you more about what will make you happy.
Top Tips For Finding The Best Rental Possible
Educate yourself: Research the rental market to fully understand the value of what you’re getting and make the most informed decisions.
Seek help: Find a real estate professional. They can help you search for a new place — typically if your minimum budget is around $1600.
What you want vs. what you need: Know what kind of property is best suited to your needs.
Prioritize: Choose three priorities. (You can’t have more than three slices of cake and eat them all too.)
Be flexible: You may want to consider joining forces with a roommate.
Network: Ask your own social network if they know of any properties of interest.
Get it in writing!: You want a hard copy of a lease. And you want it signed. And if it’s after April 30, you want to use to this new standardized contract.
Go to the showings: Look in the cabinets. Flush the toilet. Open the closets. You want to make sure everything is in good repair — or ask for it to be repaired.
Know your furniture’s measurements: It may be too expensive to find a new couch. Will yours fit in your potential space?
Lower your expectations: If you go in with low expectations, anything more will be a bonus.