It’s Becoming Extremely Difficult to Rent a Condo Near Square One in Mississauga
It's no secret that the Square One neighbourhood is quickly becoming one of the trendiest in Mississauga—and one of the hardest for renters to navigate.
While people might think that the vast array of high-rises guarantees a wealth of inventory, they would be mistaken. As of now, the rental vacancy rate in Mississauga sits at a concerningly low 0.8 per cent (a healthy rental market boasts a vacancy rate of three per cent or more).
While the odds of scoring a condo aren't ideal for prospective tenants right now (things could certainly change as the neighbourhood welcomes more condos over the coming years), the situation isn't dire.
Realtor Nik Oberoi, who operates ThinkNik, says there are things that residents can do to improve their chances of scoring a unit that's near Square One (and its brand new Food District!), Sheridan College, Celebration Square, transit and major highways. Prospective tenants have to be prepared to sell themselves to landlords and be ready to make an offer in an instant.
"I think City Centre is hotter than Toronto [right now]," Oberoi says.
"Toronto still has a lot of vacant units and units sitting for 30 and 40 days. There's a lot less inventory in terms of good rentals around Square One."
Oberoi says that while tenants might be tempted to zero in on new buildings, they might be better off widening their search to older and more mature buildings in the area.
"Not every building is well maintained. When units come up in the older buildings, some are very well-maintained and also span about 700 to 800 square feet."
Oberoi also says tenants should expect to pay more—perhaps more than what feels reasonable—for a condo.
"It's a little overpriced," he says. "At first, landlords were charging about $1,400-$1,500. [I know] $2,300 for a one bedroom doesn't make sense. I haven't had one person say 'oh, that's reasonable.' People are upset about the prices around Square One right now."
But while prices in the City Centre might seem high, the city is expensive to rent in overall. According to a recent Rentals.ca report, one-bedroom units cost about $1,891 on average through the city. Two-bedrooms cost about $2,226.
As for what's driving prices in City Centre in particular, Oberoi says that families who cannot afford low-rise homes have been competing with single people and couples for one-bedroom and one-bedroom-plus-den units, essentially making the units harder to come by and therefore more expensive.
"I think a lot of families are coming in and they're paying for a one-bedroom unit for their family of three or four people. It made the one-bedroom market so competitive."
Oberoi says this has put a strain on the resources in some buildings.
"Now there's overcrowding in a lot of buildings. Sometimes, four people live in a one-bedroom. It can cause elevator delays."
He also says desperation for a unit inevitably drove up prices.
"The tenants were desperate and willing to go over asking to get a one-bedroom. They thought they might as well pay $2,000 for a one-bedroom instead of $2,300 for a two-bedroom and now the market is overvalued. Tenants are offering more for a space to ensure they get it. The higher the rental prices go, the more you'll see over-crowded units."
Oberoi says the competition for a good unit can be fierce.
"When a good unit comes up, six people are waiting to rent it. I've personally listed three condos in the past two months, and I had a minimum of six offers per unit. One time I had eight and another time I had 10."
Oberoi also says that prices might be inflated by tenants without employment letters or credit reports—such as those who are recently employed, in between jobs or new to Canada—who offer to pay significantly higher monthly rates to ensure they have a home to live in.
"Some tenants sometimes give six months up front with extra money because they need a place. The more desperation there is, the higher rental rates you'll see."
Fortunately for prospective tenants, the situation might correct itself once more inventory crops up—and with 46 towers proposed for the area, the inventory situation is likely to change.
"I don't expect to see this last once M City and Exchange District come up. There are also more buildings coming to the Hurontario and Eglinton area. This will correct itself, but I can see this happening for the foreseeable future," he says.
So until the situation corrects itself, how can you ensure you get a place?
Oberoi says preparation is essential.
"First, get your documents ready. Whatever it is you have to prove that you can pay rent, you need to have that prepared," he says.
"Even though prices are high, landlords will look at the person who is coming in. Have your credit report, job letter, and recent pay stubs ready. You should be able to give them a full Equifax report. Anything else is deemed unprofessional, and you won't be taken seriously. The more you have prepared, the more serious you will look to the landlord. Have references available from friends, employers and past landlords. Offer to be interviewed as well. If someone is willing to meet face to face, that seems to make quite a big difference."
Oberoi also says prospective tenants should have their deposit ready to go ahead of time.
Another helpful tip?
Work with a realtor to find a suitable unit.
"A lot of landlords prefer to work with tenants with agents. A realtor is there to help you, and they won't charge you to help you find a lease. It's a no brainer to use a realtor to help negotiate for you."
Oberoi says tenants should also take care to avoid common mistakes.
"[Don't start looking for a] place before getting your documents ready. If you even take a day to get your papers in order, your unit could be gone. Make sure you can wrap up your application as quickly as possible. Once you find a place you like, you might not find something similar that you won't have to pay more for," he says.
"The biggest mistake is not being prepared. Have a PDF file with everything readable and properly scanned ready. A job letter can take two weeks to get from an HR department. You can voluntarily give a security deposit, but that should be done on a case-by-case basis."
Oberoi also says that tenants who are prepared can sometimes run into bad luck with discriminatory landlords.
"Landlords can be picky and personal preferences can come into play, even though they shouldn't. They can say they don't want this type of person or that type of person," says Oberoi.
While landlords are legally barred from discriminating against tenants based on race, ethnicity, sex, sexual orientation, gender identity or religion, some might do so. This is a serious and a violation of the Ontario Human Rights Code. Sometimes, discrimination is more overt—but some landlords might try to enforce rules that they may not realize are legally unsound. For example, they might believe it’s fine to ban pets.
But even though landlords are not legally allowed to discriminate against pet owners, Oberoi says they might turn down a candidate with a cat or dog and say the animal played no part in their decision.
"Sometimes, if I get calls from people who want to rent out spots with a dog, I tell them it might not work out. It's a shame."
Tenants who have their hearts set on a Square One condo should also note that they will be paying more than renters in other parts of the city.
"You'll be spending more than the value of the condo for the foreseeable future. Even though you might be overpaying right now, once you lock yourself into the rental rate, you're only paying an increase of 1.8 per cent a year. Lock yourself into something long-term, so you won't have to deal with higher prices as time goes on."
Flexibility is also important.
"Be prepared to see the unit the same day it comes up. Be flexible with your schedule. Having your deposit ready will help. If one person is giving first and last, it gives the landlord more piece of mind. Strategize with your landlord. Talk openly about your situation and your family's situation and prepare everything accordingly."
Although Oberoi thinks Square One rentals will see a price correction in the coming years, he says it's best for tenants to prepare for the market as it is today—and treat it as an investment.
"Approach renting like a long-term investment. Don't try to save the extra $50 to $100 a month by renting a smaller unit, because you'll save yourself from major increases if you rent the unit you want [and can grow into]," he says.
"Once you’re in a unit, you'll be laughing. You'll save a lot of money by locking yourself in long-term. Your savings won't match the price appreciation of rental units. You'll pay more than it's worth, but if you try to get a cheaper place to save for a better one, you might not be able to afford that better one in two or three years. You have to realistic about what's happening."
Oberoi also says it's crucial to pick the right building.
"Keep your mind open to other areas and older buildings. Older buildings tend to have more space and are often well-managed. Talk to the concierge to get a sense of the building. If you need Square One, the Hurontario and Eglinton area is good too. It's less expensive and is close to the mall. Look at the outskirts to find a hidden gem."
Another important tip? Don't think of renting as a bad thing.
"Renting can be great for you, depending on your situation. Buying is good for your long-term investment, but a lot of people cannot afford what they buy. So much money goes to interest payments and property taxes and maintenance fees. People end up stressed out and having to work more to pay for a mortgage. Renting is also good for people who have to move around for work."
Are you looking for a rental unit near Square One?
Cover photo courtesy of @idris.yyz