How soft is the Calgary rental market right now?

[magoomba]

I have a nicely renovated 3BR main floor near Fish Creek Park that`s
not generating much interest at all.
Previously rented for $1350 (tenant paid the utils).
And that was before the renovations.
Now I have it listed for $1350 and utils are included.

Is it because nobody likes to move in the wintertime or do I need to price
it sharper?

I have ads on Kijiji and rentfaster.ca
Should I be posting elsewhere?

 

[ChrisDavies]

Ron Roth and I did a report in Spring 2010 listing the top rental websites from Google`s perspective. You might also try Rentspot and Homerent. You can download the whole report here.

You`re right that people don`t like to move in the winter, and it`s coming up on Christmas, which is a junky time to move. The new year is often better.

One thing to consider is trying to target people looking for a 3-bedroom apartment who don`t realize they can rent a much nicer main floor of a house for the same price. It`s worked for some other people, and all you have to do is write a little more ad copy.

 

[Mike Milovick]

My understanding is the rental market is excellent. Calgary is considered the Number 1 area in Canada to invest in.

I am from Waterloo (Second best area in Canada to invest in), and vacancy is close to zero - so I would expect that Calgary should be experiencing something similar.

Mike

QUOTE (magoomba @ Nov 21 2010, 02:02 AM) I have a nicely renovated 3BR main floor near Fish Creek Park that`s
not generating much interest at all.
Previously rented for $1350 (tenant paid the utils).
And that was before the renovations.
Now I have it listed for $1350 and utils are included.

Is it because nobody likes to move in the wintertime or do I need to price
it sharper?

I have ads on Kijiji and rentfaster.ca
Should I be posting elsewhere?

 

[JimWhitelaw]

Average vacancy rates in a city, like national real estate averages, can be misleading. There can be large variances from one area/neighborhood to another. Kijiji & rentboard.ca have always worked best for me, although I heard from some Calgary investors this past weekend that rentfaster.ca was working well for them. Make sure you have good pictures, in my experience that will increase interest in your ads by an order of magnitude.

It`s a difficult time of year to rent, so you may have to offer incentives. You might want to structure it as a rental "discount" for x number of months, so you can re-adjust to market rent in the summer.

 

[wgraham]

I think that this is a game changer for investors. If you haven`t seen the new "Market Stats" feature on www.rentfaster.ca then you are missing out!! http://www.rentfaster.ca/admin/market-stats.php See exactly what is happening in the market over time. With proximity searches, listing volume and rates investors shouldn`t be using any other sites!

According to this live data, rents are back on the rise in calgary (generally speaking).

The winter is a crappy time of year to rent and I am suffering the same pain on one of my suites right now (hopefully that changes today!!) It is harder but don`t use that as an excuse....roll up the sleeves!

 

[bizaro86]

QUOTE (wgraham @ Nov 22 2010, 11:18 AM) I think that this is a game changer for investors. If you haven`t seen the new "Market Stats" feature on www.rentfaster.ca then you are missing out!! http://www.rentfaster.ca/admin/market-stats.php See exactly what is happening in the market over time. With proximity searches, listing volume and rates investors shouldn`t be using any other sites!

That is cool. Although it could definitely use some statistical upgrading. The "average" for two bedroom in condos in SW Calgary is currently $1600, but I suspect that might be skewed upward by the highest value, which is $14,995 per month. It would be better to use the median instead to pull out penthouses and people who make place value mistakes.

It also has the lowest listed as $425, which I`m pretty sure is a roommate situation and not a whole condo for rent, but its been put in the wrong section by the lister. That`s a data quality issue, which is harder to correct.

On the whole though I`m very interested in their stats, and glad they post them.

Michael

 

[JimWhitelaw]

Thanks Wade, there`s some useful tools there. As for not using other sites, I think what really matters is which sites generate interest in our rentals. Stats are cool, but they don`t pay the rent.

 

[jwilbrin]

Have you considered offering a "Professional Moving Gift Certificate" incentive during the winter months when tenants are not crazy about moving in snow.

You provide your new tenants with XXX amount of dollars in certificates that goes towards their moving cost with a professional moving company.

Rather than dropping your rent by $100 or $200 a month which I`ve seen alot of landlords doing lately, give them $500 - $600 towards a professional move. If the tenant has their items all boxed up and ready to go, the average household move is usually about 4 1/2 hours.

MiniMove (minimove.ca) is a great moving company -- they charge by 15 minute intervals. They fax you a credit card authorization form. You state on the authorization form how much you will allow charged to your card and the tenant pays anything above and beyond. The tenant must book the move themselves so that they deal directly with the moving company and understand that the moving company is responsible for any damages to their items and that any damages will be covered under the moving companies insurance. You as the landlord are not responsible for any damages to their items during the move.

Another perk to providing them with professional moving gift certificates, professional movers are much more careful moving things into your property. Less move-in damage.

I personally have never done this but always thought it might be a good idea if I ever found myself with a vacancy in the dead of winter. I`ve talked to MiniMove about this option in the past and they advised that it is definitely an arrangement that they can work with. Luckily though, I`ve always been able to rent my units before having to resort to offering incentives. (knock on wood)

 

[eatarini]

Of 65 doors in Calgary, I`m completely full with two notices. This is up from around March when I had 6 or 7 vacancies. So I feel the market has really improved. But tenants are shopping, that is for sure. I`m posting on Co-op buildboards and at the colleges. I also have contacted organizations like CUPS to let them know I would be willing to work with them and their clients. I`ve offered incentives to my other tenants for referrals. Other incentives are balance of the current month free, or a washer/dryer where there were only hook-ups. I spend more time on the descriptions in the ads. Also, I don`t stress out mid-month, having learned at REIN that the phone rings the last week and the first week of any given month.

 

[GarthChapman]

Our vacancy experience in 2010 has been a bit lower than 2009 and rents are flat. My sense is that we will see improvement in 2011 on both fronts.

 

[Thomas Beyer]

QUOTE (bizaro86 @ Nov 22 2010, 11:26 AM) ... The "average" for two bedroom in condos in SW Calgary is currently $1600, but ..
Some people have drowned in rivers 2 feet deep on average !

I`d say that $1025 for a 2BR in normal condition is "normal" right now in Calgary .. DOWN $100 to $150 from 2 years ago .. but we see it strengthening i.e. lower vacancies or less incentives or slight rises again !

Premiums are paid for
a) large size (say over 1000 sq ft)
b) location, i.e. close to downtown or LRT or university or Fish Creek Park or Elbow/Bow River pathways
c) views of Rockies or river or park
d) superb upgrades: granite counter top, stainless steel fridge, 2 bathrooms, large veranda .. or
e) newer, condo quality buildings

As we see in-migration, rising oil prices, new jobs and rising interest rates for how/condo owners it will go up as much as 20% in the next 2-3 years in Calgary I`d say .. higher than 2007/2008 .. but much overbuilt condo inventory has to be sold off too or rented if it can`t be sold so expect to see continued new competing inventory on the market for a while too !

 

[bizaro86]

QUOTE (ThomasBeyer @ Nov 22 2010, 06:17 PM) Some people have drowned in rivers 2 feet deep on average !

Indeed. My point was that 1600 is unrealistic. The high rent was over fourteen thousand dollars per month, which was obviously a typo. The statistics would be more valuable if they provided a median instead of a mean, since it would be less influenced by a few high end properties.

Michael

 

[ronaldk]

Incentive as giving the first month free could help.You might want to lower the rent as the colder it gets the sloppy the tenants get when it comes to moving.Always should have your rental agreement ending NOT during winter season.

 

[gwasser]

QUOTE (ronaldk @ Nov 22 2010, 11:16 PM) Incentive as giving the first month free could help.You might want to lower the rent as the colder it gets the sloppy the tenants get when it comes to moving.Always should have your rental agreement ending NOT during winter season.

Be carefull offering `first month free` incentives because the tenant may break the lease on the second month and you can start over. Rather offer a lower rent incentive spread out of the winter months.Or... offer a free last month on a 12 month lease.

 

[MTNPARK]

QUOTE (ChrisDavies @ Nov 21 2010, 10:19 AM) Ron Roth and I did a report in Spring 2010 listing the top rental websites from Google`s perspective. You might also try Rentspot and Homerent. You can download the whole report here. You`re right that people don`t like to move in the winter, and it`s coming up on Christmas, which is a junky time to move. The new year is often better.

One thing to consider is trying to target people looking for a 3-bedroom apartment who don`t realize they can rent a much nicer main floor of a house for the same price. It`s worked for some other people, and all you have to do is write a little more ad copy.

I`m a property manager in Calgary and I can tell you from my experience Rentfast is by far the most usefull.

For example last month I rented all five of my vacancies that came up. I decided to use Homerent.ca and Rentfast.ca and tracked the results/leads.

For those of you who have used these sites you will know that you can see how many views they are getting.

Here are the results of my analysis...

On average my Rentfast responses were 7-1 over Homerent. Interestingly according to each site the Rentfast views were only outnumbering Homerent 3-1, but for some reason the same ad on Rentfast got me 7 times more calls. Interpret that whatever way you like.

Now this dosen`t mean you shouldn`t use Homerent.ca, at the end of the day an ad is only $30, and the more exposure the better, especially in this market in Calgary right now.

Kijiji also is good especially with people relocating. I have rented out several places this year through Kijiji and all of them were from people coming from Ontario and B.C. So I would recommend kijiji. We update our ads every morning so they stay fresh and current.

 

[MTNPARK]

QUOTE (magoomba @ Nov 21 2010, 12:02 AM) I have a nicely renovated 3BR main floor near Fish Creek Park that`s
not generating much interest at all.
Previously rented for $1350 (tenant paid the utils).
And that was before the renovations.
Now I have it listed for $1350 and utils are included.

Is it because nobody likes to move in the wintertime or do I need to price
it sharper?

I have ads on Kijiji and rentfaster.ca
Should I be posting elsewhere?


I would say the Calgary market is definitely softer than at any other point this year. My rentals are experiencing price drops of around 10%. The time of the year is definitely a factor.

Two examples for you...

In August I rented out a 4 BR house in Martindale for $1,475. Right now there are about 25 listings in the area with rents from $1,100-$1,600. I honestly think if I had to find a renter for it right now I would be lucky to get $1,300. House is in good shape, but it has no garage. I`m just glad I got the owner a one year lease, because with her mortgage she`s just about breaking even.

Second example is a townhouse in Mckenzie Towne. I rented it out also in August for $1,450 (with a well trained dog). My phone was literally ringing off the hook, and I had multiple applicants. Two and half months later I put a virtually identical unit on the market. I knew prices were down a bit so I priced it at $1,395. Great pictures, unit showed very well, and I was getting very few calls. I monitor the market regularly and saw that a couple comparables had been on the market going on their second month (vacant). I knew I had to price it lower than theirs as they would be getting desperate. I`m happy to say that we got it rented at $1,300 while the other rentals continued to sit on the market at $1,400.

It just goes to show that you don`t want to chase the market down, get it priced effectively and get it rented out. Be honest with the market and don`t think about what your mortgage is, worry about the market rent.

 

[Berubeland]

I freely admit I don`t know anything about the Calgary rental market, here in Toronto, December sucks, it`s sucked for the last 13 years I`ve been renting out property.

I`m great at screening, and last year I rented out only two properties in December but both tenancies dissolved by June.

The first one was because of a marital break up.

The second ended up being a flasher, believe it or not, he stalked and flashed the other tenant in the property, then he appeared at the door buck naked after the landlord called him to tell him she was coming to fix the dryer. I had a hell of a time getting rid of him, the other tenant wouldn`t testify, and did you know it`s perfectly legal to be naked in your own home? The police wouldn`t even get involved, they said they needed proof, like a police officer observing the behaviour. The landlord looked into it some more with a police friend of hers it turned out that he had been warned 13 times before. Rent payments were always on time, he had a job and great credit. Very nice and polite during the application process. The entire thing was a new one for me. Just when you think you`ve seen it all...

So now that December is coming around again, I just keep wishing I could shut down the entire business and go to the Caribbean for a month. Unfortunately I have even more properties for rent this year.

 

[Tim in Calgary]

I've been managing in Calgary for 20 years and the market is definitely softer. What I do is check my rental price on the REIN rental site rentfaster.com. My prices are usually higher or slightly above the average. I keep my units in good shape so I usually rent them out after a month. If you're at the high end - Good Luck! Don't go for the low end - you attract the dregs. Dec and Jan are always the slowest.



If your rental is at the lower end I also have good luck using the Calgary Sun. At the high end I sometimes use the Calgary Herald (yes it's expensive)



Breakdown



1/3 rentals from sign (nicely printed - use stick-on numbers)

1/3 from rentfaster

1/3 from newspaper.



Currently have 1 vacancy (just acquied) and three move-outs (two from evictions) on 28 doors.So I will have a busy month. I should get at least 2 rented out for 8% vacancy. I was at 0% in Nov.



Good Luck



Tim in Calgary