How much should I charge for rent in Toronto?
When you are renting your property for the first time or when you have a vacancy at your existing rental you need to set a price for your rental.
There are a couple of factors to consider when setting the right price for your unit. The right price will attract the best tenants to your property and will generate a good income for you as well.
Look at Comparables to Set the Right Rent
When you are trying to decide how much to charge for your rental, one of the first things to do is look at the competition. You want to focus on rentals that are as similar to yours as possible, so you should consider:
- Look at properties in the same town as yours, but more specifically, in the same section of town as your rental. Prices can vary considerably if one side of town is considered more desirable than another.
- Number of Bedrooms and Bathrooms
- You want to look at properties that are similar in size to yours.
- Single Family Homes vs. Multifamily Homes
- Rentals in single family homes will typically command higher prices than those in multifamily homes.
- New Construction vs. Old Construction
- Prospective tenants are usually willing to pay more for rentals in new construction buildings.
Where to Look for Comparables
- Online Ads
- You can easily view properties for rent in your area on sites like Craiglist or Kijiji. Keep track of the apartments that get rented quickly, those that lower their prices and those that have been listed for weeks. You can also look at the price of the units subleted. The price of the units to rent will indicate you how much a property owner wants, not how much he will rent it for. The price of a sublet will indicate you how much a tenant is already paying for a property.
- Get a Property Manager’s Opinion
- Even if you are not planning on listing your rental with a Property Manager, you can have several Property Managers come view your property to get a price opinion. As professionals they will be able to quickly determine how your rental stacks up to the competition and how to improve the rent you can get.
- Contact us at https://www.tomadel.com/contact-us/ to get a free rental analysis of your property
Adjust Price According to Amenities
Do not set a standard price for all one bedrooms, or set a standard difference in price between one bedrooms and two bedrooms. Unless the units are exactly the same, this strategy will hurt you in the end. You should charge slightly differentl rents based on how desirable the unit is.
Set the Rent Based On:
- The view– Apartments with a garden view are more desirable than those with a view of the parking lot.
- Updates– Units with updated appliances, hardwood floors or other amenities are more desirable than those without.
- Furnitures: Units rented to students will be much more desirable is they are already furnished and the tenant is simply ready to move-in.
- Square Footage– A 1,000 square foot one bedroom is more desirable than a 700 square foot one bedroom.
- Layout– Railroad style apartments are less desirable than other layouts.
- Floor Level– Higher floors are usually more desirable.
- An extra closet, balcony or window makes a unit more desirable.
Adjust price depending on Market Demande
Setting a price for your rental is not a one time event. You must constantly look at the market and adjust the rent based on demand.
- How is the economy going? when the economy is bad, the demand for rentals can go up because people can no longer afford their homes and are forced to rent instead. A bad economy can also cause a greater demand for smaller, cheaper apartments because people have to downsize
- What time of the year is it? in the summer, the demand for larger apartments may be greater because families are trying to move before the school year starts. Also the demand for apartments close to universities such as the University of Toronto rises as students are looking for an accommodation for the beginning of school.
- Did I receive a lot of interest for the unit? If you have received several applications after the 1st few viewings then your price might be undermarket and you will want to increase it. If not a lot of people come to your viewings and you didn’t receive a lot of interest, It might be time to decrease the rent.
The basic rule of thumb is, when there is greater demand for your particular unit, you can charge a higher rent. When there is less demand, you may have to lower the rent to attract tenants.