Keeping with the theme of my last blog, “The Young and the Homeless” where I expressed frustration with Toronto’s landlords and their bias towards young people, let’s examine how you can procure the best possible lease deal in today’s hot market. Although the market heavily favours landlords, that doesn’t mean you can’t or shouldn’t try and negotiate a better deal as a prospective tenant. But first, you have to make sure the situation allows for it and that you’ve got all your ducks in a row. Below you’ll find some factors that could help you gain leverage in negotiations and save some money.
Supporting Documents
When renting, you’ll likely be asked to provide supporting documentation to the potential landlord for vetting. They typically include, but are not limited to: credit report, photo identification, rental application, job verification letter and personal references from prior landlords.
When you have ALL your supporting docs and they look good, you’re giving yourself a much better chance at negotiating a fair deal. A reference from a previous landlord is something people don’t tend to have but can help put an owner’s mind at ease. If this isn’t their first rodeo, they’ll know the value of a great tenant.
If you want to negotiate a good deal in this market but your supporting docs aren’t up to snuff (mediocre credit report, no references), you’ll likely find yourself beating a dead horse.
Days On Market
Conventional wisdom says the longer the listing has been on the market, the more leverage you’ll have in negotiations. Not entirely true with leases. Many owners will begin listing their unit 2-3 months in advance of the end of their current lease. Therefore, if a rental has been on the market for a month but has an occupancy date still a month or two away, landlords can afford to be picky and wait for the right deal.
Vacant vs. Occupied
Relatively straightforward. It goes without saying that a vacant property isn’t generating income. If you’re willing to occupy a vacant rental quickly, a landlord may be more flexible in negotiations. Having someone take quick possession of their vacant rental is very beneficial for them.
Rentals that are occupied by owners or tenants tend to favour the owner in negotiations. If the owner is currently occupying the space, there’s usually no imminent rush to get out. Thus, they can wait for the right price and tenant.
If the property is currently occupied by a renter it can go either way. If the tenant is living there month-to-month, again, there’s no real imminent need for an owner to accept a lower offer. However, if they’re moving out at the end of the lease term, an owner will want a new lease deal as close to the end of the previous lease as possible. If there’s no break between the old lease and the new one, the landlord will be more inclined to negotiate compared to someone who wants occupancy well after the end of the expiring lease.
Competition
Again, not a brain-buster. The more competition amongst similar properties, the more leverage to the renter. If you’re a condo seeker, look for a new-build that just started occupancy for residents. There are often a slew of investors within the building looking to rent their units with many being of similar size and layout. You can try negotiating with different landlords and see who gives you the best deal.
Furnished vs. Unfurnished
Advertised rental properties can either come furnished or unfurnished depending on the landlord. It’s always a good idea to see if the “furnished” box is set to yes on the MLS listing. There’s usually a price differential with unfurnished being the cheaper of the two. Some landlords who advertise as furnished may be willing to remove the furniture, while others may not. Don’t be afraid to ask, you might just save yourself some money!
So, there you have it. If you’re a landlord and reading this, don’t shoot the messenger. I’m just trying to help renters even the score any way I can in this heated Toronto rental market.