How much
rent can you get for your Condo?
Every day www.CondoBuilders.com
will get anywhere from 5 to 15
inquiries from people looking to purchase a condominium for investment
purposes asking us how much they can rent their units for? There are no easy,
or definite, answers, but we have some advice.
Most importantly, don’t
rely simply on information provided by the developer’s sales agent or even
your real estate agent. (Often this advice is based upon rents obtained in the
past rather than current rents) Markets can change very quickly and you should
hope for the best, but plan for the worst. Check all six local newspapers as
well as renter’s news and rental supplements within newspapers.
Compare asking rents for all buildings in similar areas.
Don’t expect to get a
higher rent for a brand new condo then existing 20, 30 or even 40-year-old
buildings: it’s true, most new condos are equipped with washers and dryers
and dishwashers, and all carpets and facilities are brand-new, however, a
tenant will have long-term tenure in a rental building were a condominium
owner can sell or occupy the unit herself at some future date.
Also, some of Toronto’s Signature rental buildings have an extremely
capable staff, who are able to serve tenants much better than a condominium
owner, without professional property management experience.
Another factor to consider is
available parking, even in downtown buildings.
Most tenants own cars and the majority of rental buildings have an
abundance of on site underground parking.
Often new condominiums have limited parking, and the cost is usually
much higher than what most rental buildings charge. Parking is usually
necessary to rent a condo but the landlord can rarely recover what he or she
must pay to finance and maintain the parking spot.
Rental
apartments (both condominium and rental buildings) are commodities, subject to
the law of supply and demand. A
lot of condominiums have been bought by investors who plan on renting out
these units. This increased
supply may reduce future condominium rents, so once you find the lowest priced
advertised comparable, reduce that amount by 25 percent in order to get a
rough “worst-case” scenario – and remember, depending on the occupancy
date for your building, rents could be higher, but they also could be
substantially lower.