With the novel Coronavirus putting everything on hold, Toronto investors were left scrambling to find tenants. The city\u2019s rental inventory skyrocketed as students no longer attended classes in person, immigration came to a halt, employees began working from home, and short-term rental operators, like Airbnb, were hampered by travel restrictions.<\/p>\n
\u201cWith tenants struggling to make rent payments, and the restrictions regarding Airbnb and short-term rentals, landlords have struggled to collect consistent rent,\u201d said Erica Smith, broker of record and co-founder of Stomp Realty Inc. Brokerage. \u201cMany landlords have seen their rental units stop collecting rent, hence why there is a flood of inventory on the market.\u201d<\/p>\n
COVID-19 has affected landlords all over the country, but particularly in Toronto\u2019s downtown core. The average rental price in downtown Toronto in August was $2,185 a month, the ninth month in a row where decline was evident. On average, rental prices have decreased by $200-$400 compared to this time last year.<\/p>\n
\u201cI would say, generally, buildings in the core of Toronto are struggling the most. We are seeing inventory still be rented out more in the suburbs as people are leaving the city. I do see this trend definitely continuing into 2021,\u201d said Smith.<\/p>\n
There is still light at the end of the tunnel for investors. Even as the rental market declines in Toronto\u2019s bustling core, there are still great opportunities in its suburbs, where people can work from home, and where landlords are offering renters incentives. It\u2019s helped students, young couples and single workers find great deals on living spaces that are perfect for their needs.<\/p>\n
Smith said that an incentive her team has seen quite a bit is applying last month\u2019s rent to the current month, so rather than the typical deposit that landlords collect right away, the money can be put towards a month when the renter is struggling to make ends meet.<\/p>\n
\u201cAnother incentive is to reduce rent to a point that is covering the landlord\u2019s costs. There was a period when rental rates were so high that there was a huge profit. Some landlords have adjusted to just cover their costs, which also helps the tenant,\u201d said Smith.<\/p>\n