Rental data show smaller cities up

Investors who think they need to get into big cities like Toronto to get higher rents from tenants are in for a surprise as Toronto ranked last for average monthly rents out of top GTA markets, according to new data.

The Rentseeker.ca data showed that Toronto ranked fifth behind Ajax ($1,253), Richmond Hill ($1,136), Oakville ($1,105), Markham ($1,057) and Vaughan ($1,040) for a studio apartment. The average rent for this property type in Toronto was $902.

While there are number of reasons for this, it does paints a picture for investors that bigger isn’t always better. Still, one of the reasons is that new tenancies are not covered under rent control standards, which allows landlords to charge whatever price the market demands for their rental properties.

“While existing tenants are protected from annual increases above the limits set by each province (for example, in Ontario, the 2016 increase allowed is two per cent), new tenancies are not covered,” the report said.

Rentseeker.ca compared the prices for studios and bachelor apartments, one-bedroom apartments, two-bedroom apartments and three-bedroom apartments in Toronto, Ottawa, Montreal, Vancouver, Edmonton, Winnipeg, Edmonton, Halifax, Kingston, Hamilton, London, and many other cities across Canada.

The opposite picture is happening on the West Coast with Vancouver’s studio and bachelor apartments bringing in an average monthly rent of $930, while its outlying areas are slightly cheaper, at $887 in Burnaby and $869 in Surrey.

While it may be harder to fill vacant properties in smaller cities because there is more of a rental pool in bigger cities and renters often stay longer, investors would do well to capitalize on smaller, outlying cities with more affordable homes, but more rental value for their income properties. 
 

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