Tag Archives: rent

Rent Gaps, Part I

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In a previous post (dated August 4, 2021) I examined the contribution to rent revenues that 1B and 2B purpose-built rental units make and found that 0B and 1B units contribute a lower percentage to estimated total average rent revenues than their percentage of rental supply. In this post I’m going to take a look at the “gap” between average… Read more »

Rent Revenue Contributions by Unit Type

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Data shows that 1B and 2B rental units are by far the most plentiful unit types, together making up over 80% of all purpose-built rental units in southern Ontario’s 59 largest cities and towns. This means they contribute the bulk of rent revenues. However, 1B and 2B rents are often quite different, and the different quantities of each unit type… Read more »

Maximizing Rent Increases

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In this post I’m going to revisit a topic I looked at in a post dated March 18, 2020: rent increases on turnover. In that post I compared several scenarios in which a hypothetical landlord raises rents by different amounts on turnover. I found that even in high vacancy markets in which large rent increases mean units might sit vacant… Read more »

Some Further Thoughts on Target Renters…

I remember that the first serious job I had to do when I started as a consultant in the rental housing industry (in my first week!) was to review a rent roll for a high-rise rental building in central Toronto, an older concrete slab tower almost entirely composed of 1 bed and 2 bed apartments. The landlord had kept reasonably… Read more »

The Dumbest Thing I Have Ever Seen Written About Rental Housing

I have been in the rental housing industry for over seventeen-and-a-half years now and I have heard a lot of dumb things said in meetings with clients, customers, and colleagues. I thought I couldn’t be surprised anymore, but this past weekend, while reading the Saturday edition of the Toronto Star (April 24, 2021), I burst out laughing at the dumbest… Read more »

Rents Always Go Up!

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By now we’ve all heard the famous quip thrown around by an online celebrity talking about equity markets in the United States: “stonks always go up!” Although it’s not true when talking about individual stocks, it’s definitely true when talking about broad-based indices such as the S&P500, at least over multi-year periods. There has been much discussion in Ontario about… Read more »

Toronto Star Article: “Toronto’s Rents Were Supposed To Drop”

Recently the Toronto Star published (on March 21, 2021) a long article examining vacancy rates and average rents across the city of Toronto. You can read the article via the link below (the article might be behind a paywall). https://www.thestar.com/news/gta/2021/03/20/toronto-rents-were-supposed-to-drop-as-people-fled-the-city-during-covid-19-the-data-tells-a-much-different-story.html This article uses data gathered by CMHC and explains that in most neighbourhoods in Toronto average rents increased from 2019… Read more »

Question: How Fast Will New Rentals Be Absorbed?

To start, let’s state the obvious: the easiest way to ensure your new rental building leases quickly and starts generating revenues as soon as possible is to ask rents which are affordable or ‘attainable’. But few, if any, developers have the luxury of asking rents that the bulk of renters can afford. The reality is that every developer, given development… Read more »

Question: What Rents Can New Rentals Get?

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Choosing asking rents for new purpose-built rentals is one of the key tasks which developers need to get right if they want their new rentals to be successful, both in terms of being absorbed into the housing supply in a timely manner, and in terms of generating the highest possible rent revenues. If your rents are too low your building… Read more »

Three Questions Developers Always Ask

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In my experience as a consultant developers with a new rental building either in the planning stages or under construction almost always ask three important questions. Their first question is almost always “What rents can we get?” Rents make up the bulk of revenues and if rents aren’t high enough then the proposed project might not make sense financially. The… Read more »