Some deep-pocketed tenants are offering up to 1 year down payment in Barrie’s tight market

“People who depend on rentals … are competing with people who have sold their homes,” says Barrie realtor

Faced with a landlord who wanted to sell the house she rented with her two children and her mother, Angel May found herself wading through an impossible rental market.

One after another, landlords chose to rent to dual-earner couples, leaving the single-earner mom to continue her search.

“I’m a single mum, caring for my mum, working full time and the stress of it, I honestly thought I was going to become homeless or not be able to accommodate my kids and mum,” Barrie’s wife said. “I was extremely worried. Every thought I had, every waking moment I had, was about finding a home.

An incredibly tight local housing market has led to ongoing tensions as well as disputes between landlords and tenants at the local level. May is also seeking compensation from its original landlord, who she says reversed her decision to sell after May left and rented it out again.

Barrie is continually listed on rental websites as one of the most expensive cities to rent. Last month, a website said the average rent for a one-bedroom apartment in Barrie was $1,610 and Barrie ranked fifth among the most expensive cities in the country.

Canada Mortgage and Housing Corporation (CMHC) announced last month that Barrie’s 2021 vacancy rate was 1.6%, while the provincial average was 3.4%.

When May was asked by her landlord to move out last year so she could sell the house, her original plan was to buy a house. But May soon realized she had been shut out of the deal.

Real estate prices in Barrie have seen what appears to be an unbroken escalation throughout the pandemic.

According to the Barrie and District Association of Realtors, home sales in Barrie in February saw a 35.3% increase over the same month in 2021. The average year-to-date price for homes sold in the city ​​of Barrie in February 2022 was $951,652.

May turned to the rental market.

Her search began in Innisfil, where she was a tenant and hoped to stay to maintain the connection with the local school. But her “roller coaster” search soon took her all over the southern half of Simcoe County, including Alliston, Angus, Bradford and Barrie, where she eventually settled.

After an evening spent viewing seven houses with an agent, May says she made three offers and won against a couple on a house by offering the first and last three months’ rent.

She now pays $3,050 a month, which is $1,000 more than the $2,050 rent in Innisfil, although the new house is a bit bigger.

In addition, she says that she had to transport two houses and all their related expenses for a month.

The challenge is a real estate agent that Shannon Murree has heard from many times.

“People who depend on rentals … are competing with people who have sold their homes,” she said.

Landlords can only ask for the first and last month’s rent, Murree says.

But tenants are not prohibited from offering more.

“So what’s happening now is that people who sold their property and couldn’t find a place to buy, decided to go into renting and are now offering a six-month prepayment to a full year to secure a property so they can rent it out before buying it again,” says Murree.

This then increases the pool of tenants in a very limited market and, in turn, increases competition.

“They (renters) also want nice, clean, affordable homes, but they can’t find them because they certainly can’t afford more than the first and last month’s rent,” she says.

Some people, with money from the sale of their homes, have offered to pay up to a year’s rent up front, says residential property manager Rob Hilton.

Homeowners who cannot transport their home due to the impacts of the pandemic, separation or other financial impacts end up with what Hilton describes as “a stock bubble,” also known as being home-rich and cash-poor.

They are now able to take advantage of high home values, seeing good returns on investment, providing them, in turn, with a nest egg.

“We see the offers,” Hilton says, adding that landlords can’t ask for anything more than first and last month’s rent and a key deposit. But they don’t have to turn down offers that go beyond that, as long as it’s not a condition of the lease. “We had a couple who said to us, we’ll give you a year’s head start.

“We’re also seeing this happen with students, where they’ll offer to pay four months up front” using wholesale student loan payments, he says.

Others also offered more than asking for rents.

Applications are also reviewed by owners and only those who are approved can view the property.

Rent for a studio apartment in Barrie has now exceeded $1,000 per month, while Hilton offers one-bedroom units ranging from $1,300-$1,800, two-bedroom units from $1,600-$2,300, townhouses for rent from $2,300 to $2,500 and houses can rent for up to $4,000 per month.

With restrictions lifted, Hilton sees potential for return of open houses attracting competing rental offers a strategy he says some individual owners were using before the pandemic.

Hilton, whose AG Secure Property Management manages units for 281 owners, some with three or four units each, pointed out that as a professional property manager he doesn’t use many of those strategies.

But demand, which Hilton says has been flat since June 2020, persists. On Monday mornings, he typically returns to the office to find up to 150 email inquiries for rentals.

“The real challenge right now is single-family homes,” he says.

Most properties are still subject to rent control, which is currently less than the increase in living standards. Homeowners can, instead, make a bigger income by simply selling the house, given the high year-over-year increased value.

“At this time, there is no indication that the rental market will slow down” with additional pressure anticipated as more people are shut out of the home buying market, continue to search for rentals, Hilton says.

About Gene Schafer

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