‘I don’t want to go through that again’: Toronto, Vancouver rent bidding wars leave tenants battle-scarred
With a stable, well-paying job, high credit record and impeccable references, Razib Ahmed is your dream tenant.
That is, at least, what Ahmed thought before the start of his latest house hunt early this year.
The 33-year-old product manager isn’t a newbie in Toronto’s real estate market. Born and raised in the city, he’s been renting various condo units since graduating from university.
Nothing, though, had prepared him for the four-week ordeal of his latest apartment search.
Ahmed, who’d just broken up with his girlfriend and was sleeping on an inflatable mattress at a friend’s house, was in a hurry to find a new place. (Adding to the urgency was the fact that the friend’s wife was pregnant).
But it was only after 30-plus rental viewings and seven bidding wars that he was finally able to secure a new home.
“I must have put in an application for eight to 10 places,” Ahmed told Global News.
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He would often offer to pay $50 a month over the posted rental prices. But when others jumped in, bidding more than $300 over, he had to walk away.
Eventually, Ahmed signed a lease in a building where he’d been turned down three times for other units. When a fourth unit became available, he sent out the application in advance and was the first to show up – cheque in hand – ready to sign on the dotted line. And finally, he did.
He loves the new place which is only a short commute from work. But the experience has left him shell-shocked.
“It was pretty overwhelming,” he recalled, at a time when he was still reeling emotionally from the breakup.
It’s why he’s thinking his next move might be to buy a place, instead of renting.
“I don’t want to go through something similar again.”
Jennifer Wasley knows the feeling all too well. The experience of going through a bidding war four years ago only to be evicted by the condo owner a year later is what prompted her to opt for an apartment in a purpose-rental building, from where she has no plans to move.
“I pay about $400 more a month for the privilege and am happy to do it. The security of knowing that the only way I would leave is on my own terms is everything,” she wrote to Global News in an email.
With a solid job, stellar credit record and a long history of being a model tenant, Wasley was also caught off-guard by over-asking bids.
Landing a home during her 2013 house hunt required her to offer to boost her rent cheques and move in two weeks before the advertised lease start date.
And yet, her story illustrates how much worse things have gotten for Toronto’s renters in the last few years.
While Wasley thought it shocking to have to pay more than the advertised rent, it took her only $15.50 more a month to secure a winning bid.
Toronto may have recently turned into a buyers’ market when it comes to home ownership. When it comes to renting, though, “it’s a landlords’ market,” said Dena Shiff, rental specialist with the Brel Team at Sage Real Estate.
She recalled the recent case of a client who put in 11 offers before finally signing a lease – and that required offering eight months of advance rent and $150 over the asking rent.
Nina Ferentinos, managing broker and owner at Vancouver-based Unique Accommodations, can share similar stories.
Ferentinos, who works with both tenants and owners, said she regularly sees properties attracting three or four bids from top-notch candidates. It’s not uncommon to have people send in rental applications “sight-unseen,” she said.
In both cities, where rental listings regularly attract a flurry of applications, finding a home as a tenant has become a high-stakes game, where even the slightest wrinkle in a rental application might mean losing out.
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What it takes to win a rent bidding war
The No. 1 rule is showing up with all your paperwork in order, both Shiff and Ferentinos said.
According to Shiff, that includes the rental application, an employment letter, references from previous landlords and a full credit report – not just the credit score.
If you don’t have a steady job, be ready to show a bank statement with savings that can cover several months of advance rent.
Students have it particularly tough, according to Shiff. Then it’s the parents, too, who have to provide letters of employment, bank statements and credit reports. In addition, many landlords also want to see a letter stating that Mom and Dad intend to provide financial support, as needed, to ensure prompt rent payments.
Some landlords ask for transcripts, too. And it’s often a good idea to include a brief essay describing what the candidate is studying and if he or she is from abroad, why they decided to attend university in Canada and whether they intend to stay after graduation.
Even with all of that, students generally don’t get to sign a lease without paying between two and six months of advance rents, said Shiff.
For the most coveted apartments, applying for a lease can feel a bit like a job interview.
“I’ve had to go offer presentations,” said Shiff.
Rental agents and their clients will line up in a hall, waiting for their turn to make their case to the landlord.
One tiny flaw, and you’re out
In such a tight market, it doesn’t take much to be thrown out of the race. If your credit report is anything less than excellent, it’s going to be tough.
If you just got a new job and you’re in the customary three-month probation period, many landlords will turn up their nose, both Shiff and Ferentinos said.
“Pets are also a vulnerability,” said Shiff.
Never mind that the rental said nothing about dogs and cats being unwelcome. If you have one, and your competitors don’t, that might do you in.
A few insider tips
If the big city is your house-hunting battleground, you might have a better chance searching in the late fall and winter months, when activity slows down a bit.
Also, be ready to roll with the punches, said Shiff. Don’t fixate on one place, instead, “have a top-three, or top-four.”
Finally, know when to walk out.
If a rental listing seems too good to be true, it’s probably because the listing agent is aiming for a bidding war.
Sometimes, agents will tell applicants they reserve the right to hold offers for 48 hours and even as long as 72 hours. That means your offer is binding if accepted, but the landlord might turn you down if someone better comes up.
Shiff advises her clients not to put up with that.
And while people should be prepared to go a bit above asking, going beyond $200 more per month seems unreasonable, she added.
It may be a landlord’s market, but it doesn’t have to be a fool’s game.
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