The Toronto rental market has become increasingly competitive, and bidding wars have become a common occurrence for prospective renters. As a Toronto rental agent and real estate broker with almost a decade of experience in the industry, I understand how intimidating and stressful rental bidding wars can be. That’s why I’m here to help guide you through the process and provide you with the necessary tools to come out victorious.
In this article, I will be discussing what rental bidding wars are, whether they’re legal in Ontario, and most importantly, how to win them. Whether you’re a first-time renter or a seasoned pro, this article will equip you with the knowledge and skills you need to confidently navigate the rental market and secure your dream home.
So, if you’re ready to learn the secrets of winning rental bidding wars and emerging victorious, let’s dive in.
What Is A Rental Bidding War?
A rental bidding war is a competitive situation that arises when multiple tenants are interested in renting the same property, and the landlord or property manager allows them to submit their rental offers in the hopes of selecting the best one.
In a rental bidding war, tenants offer higher monthly rent or better lease terms to outbid their competitors and secure the property. Although it’s a blind bidding process rather than an open bidding process where there is no auctioneer and the prospective tenants don’t know the terms and conditions of each others’ offers, it still makes for a competitive situation where you want to come out on top by bringing the best offer to the table in hopes of being selected.
Rental bidding wars occur for several reasons. In a high-demand rental market, such as Toronto’s, there are often more tenants looking for properties than there are available units. This creates a competitive environment where tenants must offer more attractive rental terms to stand out from other applicants. Additionally, some landlords may choose to use rental bidding wars to maximize their profits and select the best possible tenant for their property.
As long as landlords follow certain rules and regulations, they can advertise a rental unit at a fixed amount asking price and may set a time to review offers. At this time, prospective renters may present their best offer which sometimes is above the asking price. In the next section, we’ll go over how to make yourself stand out of the crowd and hopefully secure your lease.
How To Win A Rental Bidding War
1. Making A Good First Impression
A good first impression can set the stage for success in a rental bidding war. Dressing professionally, arriving on time, and being courteous and friendly to the landlord can help you stand out from the crowd. Also, having all the necessary documents and paperwork ready to go can show that you are a serious and organized renter, which may increase your chances of being chosen as the winning applicant.
2. Have A More Focused Approach
Having a more focused approach can greatly increase your chances of securing a rental unit in a competitive market. Start by narrowing down the areas you want to live in and focus your search within those neighbourhoods. This will allow you to become familiar with the area and stay on top of new listings. Limit the number of units you view in one day to two at most, and make sure you’re confident about your interest in them. This will prevent you from feeling overwhelmed and help you focus your energy on making a strong offer on a property you truly want. By being more focused, you’ll be better equipped to quickly make an offer and secure the unit before it’s gone.
3. Develop A Strategy
Having a strategy in place can be a game-changer when it comes to securing a rental unit in a highly competitive market. By having a plan, you can avoid the stress and uncertainty of a bidding war. A good example is a case study I put together with some clients I recently worked with using the tactics of a bully offer. We would wait until 2 p.m. every day to see the new listings uploaded earlier that morning. We would then schedule appointments for 1 or 2 of the new listings for the same night at around 6 in the evening. By doing so, we were able to make an offer on one of the listings we saw by 9 p.m. the same day it was listed. All this is done before the unit has a chance of being on the market for more than 24 hours since automated emails of new listings go out the following day at 2 a.m. – shortly after midnight. This strategy helped us secure a place without having to compete with other potential renters in a bidding war. So, having a strategy in place can increase your chances of securing a place, while also reducing stress and uncertainty.
4. Be Nimble
Being nimble is an essential quality to have when trying to win a rental bidding war. In today’s market, properties can come and go quickly, so it’s crucial to be able to act fast. This means being flexible with your schedule and making yourself available to view properties as soon as they become available. Connecting with a real estate agent who can keep you informed about new listings and viewings is also important. By being nimble, you can view properties as soon as they become available and get your offer in before the competition has a chance to catch up. This connects with the earlier tip of having a strategy, as being nimble is a key component of having a successful plan in place. Waiting even a few hours can put you at risk of losing out on a rental, so it’s essential to act fast and be ready to make an offer as soon as possible.
5. Be Organized
Being well-organized can give you an advantage in a rental bidding war. Having all your supporting documents ready ahead of time is crucial to make a strong offer quickly. Waiting until you find a place to start gathering documents like credit reports or letters of employment can be risky, as it may take a few days to obtain them. By being proactive and preparing all the necessary documents in advance, you can submit a complete and competitive offer as soon as you find a suitable rental property. This can increase your chances of winning the rental bidding war and securing the property you want.
6. Work With A Real Estate Agent
Working with a reputable real estate agent can be a valuable asset when it comes to winning a rental bidding war. REALTORS® are expert negotiators and can assist in presenting you as a quality tenant to the landlord. They may also have established working relationships with listing agents, which can help present your application in a better light. Some Toronto REALTORS® for renters may have a proven system in place to secure a place quickly, such as a network of contacts or a process for gathering all necessary documents ahead of time. By working with an agent, you can have peace of mind knowing that you have a professional on your side to help you navigate the competitive rental market.
7. Ask For A Second Chance
If you are not successful in your first attempt to secure a rental, don’t give up hope. Sometimes the selected tenant may back out or fail to meet the landlord’s requirements. In such a scenario, you may be offered a second chance to improve your offer. Be prepared to move quickly and make the necessary changes to your application or offer, such as increasing the rent amount or volutnarily offering to pay a larger deposit. Remember to always be courteous and professional when asking for a second chance as it may increase your chances of success.
8. Complete Research Ahead Of Time
Doing your research ahead of time can provide valuable insights into the rental market and give you a competitive advantage in a bidding war. By researching the past lease prices in the area, you can determine what a fair market value is for the unit and make an informed decision on your offer. You can also research the landlord or property management company to learn more about their rental policies and preferences. This information can help you tailor your offer to the specific needs and preferences of the landlord, increasing your chances of success.
9. Know Your Credit Score & Explain Any Blemishes
Knowing your credit score ahead of time can help you prepare and present yourself as a strong tenant in a rental bidding war. You can access your free credit report from Equifax. Many landlords will run a credit check as part of the application process, and a high credit score can make you a more attractive candidate. By checking your score ahead of time, you can identify and address any issues or discrepancies that may negatively impact your score. This way, you can provide an explanation to the landlord and assure them of your creditworthiness. Additionally, having a good credit score can also give you leverage to negotiate a better rental rate or other terms in your favour.
10. Offer More Rent Upfront
I want to preface that this tip is the one I dislike the most and will always try to avoid with my clients. However, one strategy to win a rental bidding war is to offer more rent upfront. By voluntarily offering a larger deposit, you demonstrate to the landlord that you have the financial means to pay rent consistently. It may also provide the landlord with more assurance that they will not face any financial losses in the future. It’s important to note that a landlord cannot legally require a larger deposit, but it can be voluntarily offered by the prospective tenant as a way to make their application more attractive.
11. Write An Introductory Letter
Writing an introductory letter can be a great way to make a personal connection with the landlord and set yourself apart from other prospective tenants in a rental bidding war. In the letter, you can introduce yourself, explain why you’re interested in the unit, and highlight your qualifications as a tenant. You may also mention any common interests or shared values to establish a rapport with the landlord.
In addition to making a personal connection, an introductory letter can also give you an opportunity to explain any potential red flags in your application, such as gaps in employment or a lower credit score. By addressing these issues upfront and providing explanations, you can demonstrate your responsibility and willingness to be transparent with the landlord.
It’s important to note that writing an introductory letter should be done with discretion and professionalism. Avoid oversharing personal details or making unrealistic promises, and make sure to proofread the letter for spelling and grammar errors before submitting it.
Bonus Tip: Treat The Current Tenant Like The Landlord
Treating the current tenant with respect and courtesy can be a strategic move in a rental bidding war, particularly when the rental unit is currently occupied. Landlords often have good relationships with their tenants, who may provide valuable input on potential new tenants. By being respectful of the tenant’s space and time during viewings, you can make a positive impression and potentially receive a good recommendation from the current tenant to the landlord. This may set you apart from other prospective tenants and increase your chances of winning the rental bidding war.
Should I Use A Real Estate Agent To Find A Rental?
Using a real estate agent to find a rental in Toronto can offer several benefits. Real estate agents have in-depth knowledge of the rental market and can help you navigate through the process, making it smoother and less stressful. Here are some ways a real estate agent can help:
Access to more listings: Real estate agents have access to a wider range of rental listings, including exclusive listings that are not publicly available as well as unique properties such as hard lofts.
Time-saving: Real estate agents can save you time by filtering out rental listings that do not meet your criteria and only showing you those that fit your preferences. This can save you hours of searching online.
Negotiating power: Real estate agents are skilled negotiators who can help you get the best possible deal on your rental. They can help you negotiate the rent, lease terms, and other details.
Expertise: Real estate agents have in-depth knowledge of the rental market, including neighbourhood trends, rental rates, and tenant rights. They can answer any rental questions you have and guide you through the process.
Connections: Real estate agents may have established relationships with landlords, property managers, and other agents. They can leverage these connections to help you secure a rental.
In summary, using a real estate agent to find a rental in Toronto can help you save time, access more listings, negotiate a better deal, and provide expertise and guidance throughout the rental process.
Final Thoughts On Winning A Rental Bidding War
In conclusion, winning a rental bidding war requires a combination of strategy, research, organization, and flexibility. Renters should narrow their search area, have a strategy in place, be nimble, and work with a real estate agent to increase their chances of securing a rental unit.
Doing research ahead of time, knowing your credit score, and offering more rent upfront can also be helpful. Additionally, showing respect to the current tenant and writing an introductory letter can set you apart from other prospective tenants. It’s important to do your due diligence before making an offer and to be prepared with all necessary documents. To ensure a smooth rental process, renters are encouraged to get in touch with a reliable real estate agent like Marco Pedri for their rental needs.
As the rental market in Toronto continues to be competitive, it is crucial to be well-prepared and informed to increase your chances of winning a rental bidding war and living in Toronto. By following the tips and strategies outlined in this article, prospective renters can be well-equipped to secure the rental unit of their dreams.
