It has been a difficult year with Covid 19. An overwhelming number of cases of non-payment of rent have caused extreme financial strain for some landlords. To make matters worse, the Landlord Tenant board (LTB) is significantly backlogged with eviction applications. This means that landlords may be stuck with tenants living in a rental unit and not paying rent while still being responsible for paying expenses and a mortgage.
CMHC has just come out with their vacancy rate numbers for Ottawa and they have doubled to 3.9%. Should landlords be concerned. For the time being yes. Now is the time to prepare for a flat rental market if you have not already done so. A flat rental market is no different than a flat housing market. High supply and low demand mean that buyers/renters have the upper hand and get more for less. For landlords who have a quality property in a quality neighbourhood there will always be demand for your rental unit even in a weak rental market and finding a quality tenant should not be a problem. However, if your rental unit does not fall into this category you will need to make some adjustments in order to stay competitive with other similar rental units on the market.
The most important thing in owning rental properties is maintaining good cash flow. Plain and simple. If you currently have vacancies, you need to act quickly and optimize the rentability of your rental unit. This does not mean compromising when selecting a tenant: finding a quality tenant is still very important. However, since you now have many more rental units to compete with you will need to re-evaluate the condition ant rent price of your unit.
There are a few easy and inexpensive tasks you can do to give yourself a competitive edge. A deep cleaning of a unit can make a big difference. Consider some cosmetic improvements that you may have been putting off. There are many small things that you can do to improve the look of your rental unit. The most obvious improvement is to paint, and this will do wonders for a tired looking unit. Consider upgrading the appliances and bathroom fixtures. Nice kitchens and bathrooms are extremely important to tenants. These are just a few small things that you can do quickly and inexpensively that could make the difference when getting your unit rented.
Obviously, another way to be more attractive is to lower your rent or give incentives. No landlord wants to do this, but the reality is it is better to bring in a little less cash flow than nothing at all.
I fully believe that the rental market in Ottawa will strengthen again once the pandemic is under control. This is just a bump in the road. Ottawa has always maintained one of the lowest vacancy rates in the country and I am confident that those low numbers will return in the near future.