Whenever we work with tenant clients, we start off by having a heart to heart about how it works.

We’ve previously written about how landlords think and what they look for in a prospective tenant and the three questions they ask themselves.

This is a useful starting point for a tenant to understand the perspective of most landlords and if you haven’t read it, please do!  Today, we thought we’d get into how tenants can inadvertently make it very difficult to find a new rental property where the landlord wants them as tenants.

Below are the three biggest mistakes tenants make when looking for a new rental.  If you avoid these mistakes, you’re well on your way to making it easy to find a new place!

Mistake # 1 – You can’t afford that place.

One of the hardest parts of being an adult is balancing what you want against what you can afford.  This is particularly true when it comes to housing, both buying a place and renting a place.

On the buying side of things, we often have buyer clients who are approved for a mortgage (and monthly payment) that is more than what they’re comfortable spending.  This is a good situation, as it means they can buy a place under their approved mortgage limit and be comfortable with what it costs them each month.

The renting side of things is unfortunately often the other way.  Many tenants have a budget in mind that is feasible for their financial circumstances, but higher than the standard guidelines for rent to income ratios.

While it is not allowed to refuse a tenant on the grounds of a specific income to rent ratio, in practice many landlords follow the generally accepted rule of thumb where a tenant should not spend more than 30% to 40% of gross (before tax) income on housing costs.

The below chart has the “required” income based on monthly rent ranging from $1,500 to $5,000.

The green text columns are the annual, bi-weekly and monthly income needed at the 40% level, which is pretty much the lowest income a landlord would consider for the monthly rent in question.

The black text columns beside the green ones are the 30% level for the monthly rent.  Put the two together and you have the range that would likely be acceptable to a landlord for your income.

As of March, 2025, the average rent in the GTA is just over $2,700 per month.  We’ve highlighted that row in yellow in the chart above.  We can see that if a tenant can “afford” $2,700 a month for their rent, they need to make between $81,000 to $108,000 a year.  That’s $3,100 to $4,200 for the gross bi-weekly pay cheque, or between $6,200 to $8,200 a month.

If that seems like a very high income for that level of rent, you’re not alone in thinking so.  It is often a big surprise to tenants that a landlord thinks they can’t afford a place.  This is because tenants typically think that anything that is less than their monthly income is “affordable” to some extent.  This makes some level of sense as you can pay that rent each month based on your income.  There are of course, other significant expenses that people must pay for out of their income – food, transportation, personal needs and so forth.

With landlords looking to see someone spending 30% to 40% of their gross income on rent, and tenants willing to spend considerably more, you have the makings of a disconnect that causes problems.

If you’re a tenant setting your budget, set the number you’d be comfortable paying, that you’re confident won’t be an issue.  At the same time, find your income in the chart above to see what level of rent you’d be able to afford based on that 30% to 40% ratio.  If the number is similar, you’re in good shape to be able to show a landlord you can afford the place.  If the number you “qualify” for in the chart is much lower than what you need to spend in order to get the type of place you want, then be prepared to show the landlord how you will be able to pay the rent.

Mistake # 2 – You can’t live comfortably in that place.

The second biggest mistake that we see tenants make is applying for a home where the attributes of the home don’t match the needs of the tenant.

The most common example of this is where a number of people apply for a smaller rental where there doesn’t seem to be enough space.  This is a practical solution to the problem of affordability, where the rent being charged is too much for a single income, but possible for tenants who have multiple incomes amongst them.

Despite the property now being affordable based on the 30 to 40% ratio of rent to income, there is a disconnect between the size of the space and the number of people living there.  While a couple can live in a 500 sf space with a similar level of comfort as a single individual, if there are three adults, or additional children who are going to be living in the space, landlords are concerned about how this will be addressed.  Part of that concern has to do with wear and tear on the space from the additional tenants, but in some cases, it means changes to how the space was intended to be used.  A one bedroom unit with three adults applying to live in the space will likely see the living areas subdivided into sleeping areas.  Whenever a place is used in ways that are different to the intended use, accommodations are made to make it possible and they can cause damage to the unit.  If a bed is placed in a hallway, damage to walls will likely occur.  If a living room is converted to a bedroom and a bed located beside the kitchen, safety hazards can result.

It is illegal to charge a damage deposit in Ontario, so if you’re part of a tenant group that is trying to make a place affordable by having more people stay there, you need to be clear on how you’d respect the property.  Given tenants cannot offer a damage deposit, offering a higher rent than asked may be a way to provide the landlord peace of mind that any additional wear and tear won’t result in out of pocket expenses.

Mistake #3 – You don’t have a good (or any) track record.

The third big mistake that tenants make is underestimating the impact of not having a good – or any – track record for landlords to review.

The first aspect related to this is credit history.  Whether you’re a newcomer to the country, or just starting off into adulthood, a lack of credit history can be a challenge.  Landlords are always trying to assess whether a prospective tenant will be a responsible occupant of the property on a mid to long-term basis.  When there is a credit history showing responsible financial activity, with an accompanying good credit score, it makes landlords feel comfortable with the tenant.

While a limited credit history with no credit score is a challenge, it can be overcome by guarantors on the application who do have a lengthy credit history and a great credit score.  A much more substantial problem is for tenants who have made some poor financial decisions and have low credit scores as a result.  In such a case, we recommend tenants address the issue head on with their application, explaining how they got in that situation, and crucially, how it will improve.

Many tenants understand that a good financial track record is important, but they fail to realize that employment and rental history is also considered by a prospective landlord.

If you’re in a new role or industry, whether freshly graduated or simply in a new career, you need to be aware that landlords are uncertain as to whether you will continue to be employed in your current role.  This is somewhat unfair, as an individual employed for ten years at the same company can be fired the day after they start a new tenancy, but it is still an issue if you’re applying for a place after starting a new job.  In such cases, going above and beyond the typical job letter is important.  If you can provide a personal reference letter from your employer talking about your prospects in the career, that can go a long way to making a landlord feel comfortable.

Finally, a red flag for many landlords is a history of multiple rentals in a short term.  If you’ve stayed at your last three rental properties for a year at each, the question that arises is why you only stay that long.  If there were issues with the properties or the landlord that caused you to decide to leave, be cautious with sharing those complaints, as it can make you appear to be a demanding or unreasonable tenant.  If it was happening for reasons outside of your control, such as the landlords selling the property each time you were just getting settled in, share that story as part of your application.

When you are trying to find a new rental home, the above mistakes can make it very difficult to find a landlord willing to take you on as their new tenant.  While you cannot change aspects such as your current income, your family or your track record for credit, employment and tenancy, you can make efforts to address them directly with explanations.

If you need an agent to help you find your next home to rent, or you’re a landlord who wants a good tenant, then we’re here to help.  Get in touch with us to talk about the next steps!

We’ve previously written about the red flags that tell us that a particular buyer or seller is likely to cause a problem but today we wanted to share some hints that the agent on the other side might not be showing up at their best.

After all, it can be easy to say a buyer or seller isn’t going to make the deal process smooth, but this isn’t something they do all the time.  When the problems come from the agent on the other side of the transaction, whose job is to facilitate these transactions, it becomes a lot harder to stay positive.

Here are three red flags when dealing with a real estate agent that tell us it might not be the best experience.  We’re including a bonus real-life story that illustrates this point after each red flag, so let’s get into it.

It’s their job to know things and they don’t know things.

It was Sir Francis Bacon who first said, “Knowledge is power.”  Our first red flag is when an agent doesn’t know the things that they must know in order to do their jobs properly.  This shows up in different ways depending on if they are a listing agent or a purchasing agent.

For a listing agent selling a home, it’s when we see gaps or missing information in the listing.

• No square footage or room dimensions or floorplans.
• No pictures of the home, or only limited pictures that only show exteriors or non-relevant parts of the property. We do appreciate the artistic merit of that close up of the vase on the table but given neither are coming with the property, we would have preferred a picture of the basement.
• No Schedules attached to the listing that will be required for an agent to submit an offer.
• No information on how the seller wants showings booked or offers submitted.

For a buyer agent, it’s when they ask us questions they should either know or where we have already provided the answer.

• Asking for square footage when the listing says square footage and has a detailed floorplan.
• Asking for information we both have access to through our membership with the Toronto Regional Real Estate Board, such as assessed value, seller’s purchase date and building particulars.
• Ignoring instructions for showings or offers that are clearly stated.

If an agent doesn’t care enough to gather the information that their client needs to properly sell or buy, then it is likely that this transaction is going to be challenging.  After all, a lazy agent who doesn’t care is not likely to suddenly become a diligent professional during the offer process.

Our favourite story illustrating this point is the agent who listed a condo for sale with an owned parking spot. 

When we did up the offer, we couldn’t find any reference on the land registry to an owned parking spot.  After multiple questions and him suggesting we would figure it out before closing, he told us he must have made a mistake and there in fact wasn’t a parking spot.  No deal.

Taking their sweet time getting back to us.

One of the basic rules with real estate transactions is that time is of the essence.  There are multiple parties involved (buyer, seller, agents on both sides, lawyers, mortgage brokers, lenders, home inspectors, insurance brokers and so on) and delays can, and do, cause deals to fail.

The second red flag that tells us an agent is going to be a problem is when they don’t respond to us in a timely fashion.

We do understand that Realtors are first and foremost people, and as such they have their own lives with demands on their time from family and other obligations.  While we may understand that agents can’t be on call and ready to respond 24/7, 365 days a year, we do feel that 2/3, 16 days a year is not really acceptable.  For the record, we’re saying if you make yourself available about two hours every three days, working about 16 days a year, you may not to reconsider whether being a real estate agent is the job for you.

That may sound harsh, but we believe that if you aren’t organized and prepared to respond quickly to the needs of your client, you shouldn’t be hired.

It’s one of the peculiarities of real estate that people will hire agents who don’t make doing the job a priority.  If you took your car in to have your winter tires installed and they ignored your calls for a few days and then finally responded, you’d likely be very annoyed.  If they told you that a bad cold is going through their house, so things got delayed, but your car will be ready in a day or so, you’d probably be furious.

In real estate, the covenant is simple.  You hire a Realtor to be your agent in buying or selling real estate.  If situations in their life make it impossible for them to do that on a timely basis, they don’t deserve to be your Realtor.

Whenever we have significant gaps in hearing back from an agent about their listing or their client’s interest in our property, I know that it is not going to be a smooth process.  An agent who doesn’t understand the urgency in real estate often has a client who doesn’t understand it either.  In both cases, it translates into a low chance of a deal taking place.

Our favourite story illustrating this red flag happened just recently. 

An agent who had shown one of our listings was super interested, then disappeared for a few days, only to suddenly reappear and announce he had an offer for us.  After some negotiations, we signed back an offer that expired at 10:00 p.m.  The deadline came and passed, and he stopped responding to calls for an hour before finally saying his clients had their dinner out go late.  As of 10:00 p.m. the deal was dead as it legally expired.  We had to explain he would need to now resubmit an offer and see if our clients still wanted to deal with him.  He’s lucky because they agreed to it, but he almost lost the deal because he and his client didn’t understand that deadlines in real estate have consequences.

They work for a discount brokerage.

By law, all real estate agents must work as independent sales representatives within a real estate brokerage, but not all brokerages are created equal.  It isn’t always the case, but over the years we have noticed that the agents that we have trouble with have chosen to work for what we would call a discount brokerage.

Broadly speaking, there are two options for Realtors when they are choosing a brokerage.

They can choose a full-service brokerage like Keller Williams.  These brokerages take a significant percentage of the agent’s commissions, but provide support, training and are focused on helping their agents grow their business through good work and satisfied clients.

The other option is choosing a discount brokerage.  There are numerous real estate companies that follow this model (Right at Home is a prominent one) and these brokerages take a flat fee for each deal the agent does and provide back office services to process the transaction.  They are focused on having as many agents as possible within the brokerage and keeping the cost the agent pays very low.

There are of, of course, bad agents at full-service brokerages and good agents at discount brokerages.  That is, however, the exception that proves the rule.

Whenever we see a listing is with an agent who choose to work with a reputable, full-service brokerage, it is likely they are concerned with more than just how much money they take home from one particular deal.  They want to be professionals and as such they chose a professional brokerage.  They have colleagues who set expectations for how an agent acts and what they do for their clients.

When we see a listing with a discount brokerage, we know they chose the cheapest possible option to legally satisfy the framework of having to work within a brokerage.  They made the choice to focus on saving as much of their commission as possible and they work with like-minded people.  Almost without fail, the listings where the marketing is abysmal comes from agents with discount brokerages.

Our favourite story illustrating this was a listing we sold a few years back. 

The agent who represented the buyers was pushy and tried to submit a pre-emptive, bully offer before the date we’d set for reviewing offers.  When we refused to review it as per my client’s instructions, she did not understand, and we had to explain the process and how we had written instructions from our client saying they would not review an offer until the set date.  She resubmitted on our offer date and ended up purchasing the home for her clients.  It was a firm deal, and we were surprised a few days later when she called saying there was a problem. 

Her clients had decided that since there wasn’t a third full washroom in the basement, they overpaid and now they wanted a lower price.  We told her that we had a firm, legally binding deal and the number of washrooms in the house was on the listing and known to her clients beforehand.  It’s frankly astounding that we had to explain to a licensed Realtor that the seller was not willing, nor obligated in any way, to reduce the agreed upon sale price to a lower price after the fact.  The agent worked for a discount brokerage and she clearly didn’t have experienced colleagues who could have told her that’s not how things work.

While we deal with good agents on a regular basis, part of being an active, busy real estate team is that we also encounter agents who for one reason or another, make the transaction very frustrating.

If you or someone you know wants to work with a Realtor who knows what they are doing and is committed to doing the full job on a full-time basis, please get in touch with us here.

It is quite surprising how many tenants as well as how many agents representing tenants don’t understand how a landlord assesses a rental application and decides whether they want to proceed or keep looking for a better fit for their rental unit.

Given that in Toronto, the average rents for one-bedroom and two-bedroom apartments are now both at record levels, it is very important information for any tenant looking for a new place to call home.  It’s equally crucial for landlords who may not have been following the best approach when choosing tenants and have since had less than stellar experiences.

Let’s review the current (July, 2022) rental market situation and then reveal the three top things that smart landlords look for in a tenant.

That is one tight rental market!

As of July 28, 2022, the condominium apartment rental market conditions have tightened dramatically when compared to a year ago.

Average rents for one-bedroom and two-bedroom apartments are now both at record levels, surpassing the previous peak in Q3 2019.   There were 13,203 condo apartment rental transactions reported through the Toronto Regional Real Estate Board (TRREB) MLS® System in Q2 2022 – down 11.4 per cent compared to Q2 2021.

The dip in rentals was not the result of waning demand, but instead a much more pronounced dip in the number of rental listings, dropping by almost 30 per cent year-over-year. With less choice, it was much more difficult for renters to get deals done.

This is not likely to be a temporary, short-term situation either, as higher borrowing costs keep some buyers out of the market (and remaining in the tenant market) and the GTA population continues to grow alongside a booming regional economy.  When you have consistent or even growing rental demand, with dropping rental supply, rental prices go up.

According to the latest TRREB data, average condo rents were up by double digits annually for all bedroom types in the second quarter. The average one-bedroom rent increased by 20.2 per cent year-over-year to $2,269. Over the same period, the average two-bedroom rent was up by 15.3 per cent to $2,979.

Whether you’re a tenant struggling to find a good place to rent or a landlord trying to decide among lots of interested applicants, it’s important to understand the most important factors in what makes a desirable tenant application.  Smart landlords look to find a tenant where the answer to the three most important questions is always the same – a definitive yes.

Question #1 – Can they afford the place?

While this seems like the obvious starting point for whether a tenant will be favourably considered by a landlord, it is in fact the number one reason why a tenant is told no to their application.

A generally accepted rule of thumb is that you should spend no more than 30% of your gross (before tax) income on your housing costs.  Some experts push that a bit to say up to 35% or even 40% but we have not encountered any credible sources that think spending more than that level of your income on shelter is sustainable.  All people need funds for other costs like food and clothing, as well as some discretionary funds.

We often tell landlords to use the 1/3 rule as an easy way of assessing a potential tenant.  If you have a unit where you’re asking rent of $2,400 per month and the tenant pays hydro and electricity of about $100 per month on top of that, the tenant has housing costs of $2,500 per month.  That’s $30,000 per year.  If the tenant makes less than $90,000 per year, you’re getting into a situation where they may not be able to afford the rent if some other unexpected expenses come up.  If everything else looks good, a smart landlord might still proceed, but if they make less than $90K and have some other issues with the application, you’re asking for trouble if you hand the keys over.

Question #2 – Do they have a good track record?

This question gets to the heart of whether the prospective tenant will be a responsible occupant of the property on a mid to long-term basis.  There are a number of ways in which a smart landlord can assess track record.

• What’s their credit score? A good credit score is established and maintained over a length of time by establishing financial commitments and living up to them.  A tenant who has had a car loan for five years and had paid on time consistently is a good indication they understand financial commitments and have the stability to live up to their obligations.
• Have they been a tenant at other properties for typical lengths of time (one year or longer) or have they moved around from short-term tenancy to short-term tenancy? While there can be valid reasons for such activity, it is often the sign of a bad tenant who is being evicted or leaves their rental to escape problems they are encountering.
• Is their employment record consistent or inconsistent and has it changed recently? Someone who makes good money at a job they have had for a long time is likely to continue to be able to live and act in a way consistent with their past behaviour.  A new job or role every couple of years is often accompanied with financial struggle and if they have just switched to a new role, it is worth considering how that might impact their track record moving forward.

A good track record isn’t necessarily a sign that they will continue to be responsible, consistent people moving forward, but it is certainly much preferred over someone with a spotty track record or no track record at all.

Question #3 – Do you feel comfortable with their overall package and approach?

This final question is more about following your gut.  A smart landlord (with an experienced agent on their side) can identify red flags in applications  and the approach being taken by the tenant or their agent that should cause concern.

A few questions that should clarify the situation are as follows.  If the answer isn’t yes to these questions, then think twice before you proceed.

• Did they provide all of the requested information in the application package? A tenant who applies but skips certain aspects of the process is either inattentive, disorganized, or trying to hide a potential red flag.  Regardless of the reason, if they can’t be bothered to follow the rules as established for the application, it does not bode well for them following the rules of the tenancy, such as payment on time, respecting condo rules, maintaining the property, etc.
• Does it seem (as far as you can tell) like they will continue to be reliable? It can be hard to be consistent and responsible when there are major changes in circumstances, so a smart landlord looks for recent or upcoming changes.  If the tenant was employed full-time with a salary but started their own business two months ago, the past history of financial responsibility may not continue.  If the tenant has a great credit score but has had a dozen credit checks performed by debt companies in the past three months, they may have encountered financial issues and are starting to build up debt that can cause financial issues moving forward.  While changes in a tenant’s life don’t necessarily mean their track record will sudden change, it is worth looking to see if the circumstances that allowed them to be a good applicant will continue to be in place once you hand over the keys.
• Are their expectations and questions reasonable? A prospective tenant who is asking for unusual actions on the part of the landlord (such as agreement to take rent payments in cash or provide a minimum of 48 hours notice for visits) can indicate they are not reasonable individuals who may have some unreasonable plans for their time at the property.  The reverse of this is true as well, and smart landlords look out for tenants who don’t care about things that most people would need to know.  A tenant who says don’t worry about having it cleaned after the prior tenant leaves, or who reacts to news of a temporary defect (such as AC needing to be replaced as it isn’t functioning) with no concern can also be red flags.  A good tenant, with good income and a good track record, has reasonable expectations for their rental and their landlord.  Be wary of a tenant who doesn’t seem to care about anything most people would want to know more about.

There is no simple formula for assessing how comfortable a landlord will be with a prospective tenant, but whether you’re looking at it from a landlord’s side or a tenant’s side, think about the big picture and whether there might be some less tangible causes for concern.

In tight rental market conditions, landlords have more choice and tenants have more difficulty securing a rental home.  If you’re a landlord, make sure you consider these three questions so that you’re choosing the best possible option amongst the applicants.  If you’re a tenant, likewise review these three questions and consider what you could do in order to best present yourself.

In either case, if you want to work with agents that understand the rental process and will work with you to get it done properly, don’t hesitate to get in touch with us.

When you’re buying or selling real estate, you need, at a minimum, a buyer and a seller.  While that’s a pretty low bar, not all properties are created equal and not all buyers and sellers are equal in their ability to close a transaction smoothly, without problems, and on time.

Over time, we’ve identified certain red flags that tell us that the person on the other side of the deal may be less than ideal.  While looking for perfection in the party on the other side of the deal can be counter-productive, it is smart to not overlook clear indications that this deal could be trouble.

Here’s three red flags to watch out for when you’re selling a property.

Buyer Red Flag – Not Respecting the Rules

When you are selling a property, you establish how that sale will proceed.  This includes when the property will be available for showings, what timeframe we’re asking for with offers, requested deposit percentage and so forth.

When a buyer is violating those rules during the for sale period, it’s a red flag that they won’t follow the rules during the conditional period or after it firms but before the sale closes.

If you see a buyer who wants to do things their way from the beginning, it’s likely they won’t suddenly become a considerate person who does things as requested throughout the process.

Buyer Red Flag – Not Listening to their Agent

A corollary to the first red flag above is when a buyer doesn’t listen to what their agent says.

There are pretty specific rules about communication in real estate.  Agents communicate with each other and with their respective clients.  We aren’t permitted to communicate directly with another agent’s clients unless it is discussed and agreed upon.  This is something that the majority of buyers and sellers understand and respect.

If a buyer disregards this or other advice from their agent, it a clear red flag that they think they can do things however they want.  If the buyer’s agent isn’t in control of their client and is merely relaying what the buyer wants, it is a sign that things are not going to go smoothly.  If you ever hear a buyer’s agent abdicate responsibility for their client and say that’s just what my client wants, be wary.  An important part of the role of a Realtor is to help the client understand how transactions take place and to make sure they move smoothly.  If a buyer isn’t listening to their agent, problems will start occurring.

Buyer Red Flag – Not Living Up to Promises

Real estate transactions are done through written contracts that clearly specify the terms of the transaction.  In addition, throughout the showing, conditional and firm period, there are promises made on both sides.

If a buyer shows up late to a booked showing, or not at all, it’s a potential red flag.  If the deposit cheque that is required to be provided within 24 hours isn’t available for longer with no prior discussion, it’s a red flag.  If the conditional period for a mortgage review is five days and on the fifth day the agent finally says they need more time after ignoring requests for updates, it’s a red flag.

In general, people behave consistently in one way or another.  A diligent, responsive buyer is unlikely to turn into a reluctant, unresponsive buyer partway through the process.  If the buyer is consistently failing to live up to promises (verbal or written), then it is a red flag that the rest of the deal will continue in this fashion and perhaps not successfully transact.

Just like on the buying side, there are red flags that indicate a seller is going to cause problems with a deal.

Seller Red Flag – No Attention to Detail

A huge benefit to being on the buy side is that, in many cases, you get to see how the seller lives.  While sellers often present the best-case version of their home, it is impossible for a seller to fundamentally change who they are and how they live.

If you’re visiting a home and it looks good on the surface, but closer examination reveals a different story, it is a red flag that the seller is not someone who is focused on the details.  When you see a red flag like that, it means you will need to look closer at more aspects of the home.  Such a seller is unlikely to have done regular maintenance on the home or properly cared for the mechanicals or appliances.

Seller Red Flag – Lack of Consideration

While things have changed in 2020 with the rise of COVID-19, the physical showing of a property is still an important part of the buyer process for many buyers.

If a seller has severely restricted showing times, fails to leave the home ready for showings (snow not shovelled for days, lights left off in the evening when they leave for a buyer showing, etc.) or generally treats potential buyers as intruders rather than guests, it is a red flag.

Such a seller will likely continue to not show consideration for you as a buyer during the rest of the process and if there is a situation that requires flexibility, it is not likely to be given.

Seller Red Flag – Unprepared to Show

The final red flag for a seller is when you encounter a property that is clearly unprepared for showings.  When the seller has made little to know effort to prepare for potential buyers to see the home, it is a sign that they are not motivated to sell or don’t think they should have to change a thing about their lifestyle in order to sell.

These types of sellers often give off a vibe of you being lucky to see their home and this attitude often extends into the negotiation process.  Such a seller is unlikely to be willing to listen to reason when it comes to negotiating and often won’t care about what is important to you as a buyer.

If a deal is done despite such red flags, it is very important to monitor the process through each step of the sale.  Such sellers are much more likely to drag their heels when hiring a lawyer, movers, packing and leaving the property in good shape.

No buyer or seller is perfect and sometimes the best opportunities come when the party on the other side has exhausted or angered other potential options for them to get a deal done.

If you work with a Realtor that understands the red flags, they can help you avoid problems or steer you through them to a successful completion.  If that sounds appealing, we’re here to help move you forward.