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Renting Basics - Before Your Start

Choosing The Location For Your Next Apartment

Location - the all-important factor in deciding where to live. For many people, this is the most important element. First, you’ll need to understand the criteria for choosing a fitting location – cost and lifestyle.

Cost: In general, most neighborhoods have a range of rental values that most people can fit into, but your budget could influence where you choose to live. Remember that high-end areas also have more expensive amenities.

For example, someone on a tight budget likely can’t afford to live in Yorkville in Toronto, not only due to the higher than average rent in that neighborhood, but also because groceries and other amenities like dry cleaning are higher as well. In a higher-end area like Yorkville, parking will also be expensive, so take note of this if you’re expecting to have lots of your friends hang out at your place.

Lifestyle: Finding an apartment location that suits your lifestyle is also very important. There are many factors you need to consider when choosing an area including:
  • Travel time: to work, public transport, family/friends, shopping, food, ATMs or medical facilities.
  • Educational Facilities: childcare, elementary or high school, college or university
  • Recreational Facilities: Gym, outdoor sporting facilities, parks, libraries or entertainment
  • Environment: Appealing streetscape, low noise area (away from traffic, flight paths and industry), and look and feel including demographics.

Now that you better understand your needs and requirements, you’ll need to choose a few neighborhoods to target in your rental search. If you don’t already have a few neighborhood options in mind, then check out myhood.ca’s Toronto hood briefs to help you select a few fitting neighbourhoods. While you may have a top choice, we suggest that you don’t limit yourself to just one neighborhood, as competition for the unit you’re looking for could be fierce.
October 17th, 2007 at 9:51:35 am by the myhood.ca team

What Type of Rental Housing is Best for You?

There are many different types of rental housing available, including:

Apartments: Management companies, called property managers, are the typical owners of apartment buildings. Many own numerous buildings around the city, province and country. Apartment buildings range in condition, from new condo-looking buildings, to buildings that aren’t fit for people to live in – but they do (aka slumlords). On average, most apartment buildings are on the old side, but are in reasonable condition, fit for anybody to live in. Most of the rental units available in any city are in apartment buildings owned by property managers. The benefits of living in these buildings is that they’re well maintained, the superintendent lives in the building so any problems are seen to relatively immediately, you’ll have your choice of location around the city and these buildings fit all budgets. Apartments usually have a mix of bachelor, one bedroom and two bedroom units and usually have parking spaces available for an extra cost.

Condos/Lofts: Condos and lofts are are typically owned by an individual. (vs. a property manager). In general, condos are nicer and typically more expensive than apartments. Condos have the same range of rooms as apartments and are typically all high-rise buildings. Lofts differ in this area, as they are essentially one large room in a mid-sized building. Condos usually have security guards – an element only the higher-end apartments have. As condo owners are individuals, the response to problems can vary. Some condos have parking included in the price – a difference from many apartments.

Houses: Depending on the area, houses may be a considerable rental option in the form of a room, floor, basement, duplex, or an entire house. If you’re looking for character and want to live as part of neighborhood, a “house” is your best option. Like condos, houses are owned by an individual so the condition can vary along with the response to any problems and questions. Many of the cheapest rental options in an area, especially in prime areas are basement apartments in houses.

Co-ops: Co-op housing is member-controlled housing. The members who live in a co-op are the ones responsible for running that co-op. Each member has a vote and every year members elect a Board of Directors from the membership. Housing co-ops are in every neighborhood in any city. A co-op can be a medium size apartment building or townhouses. People who live in co-ops come from every walk of life. Co-ops can provide affordable housing for people with moderate incomes. Rents in housing co-ops are often lower than the regular rental market. This is because Co-ops are non-profit organizations. If there are housing charge increases, they usually reflect true costs, not profit margins.

Campus residences: Campus residences are for students, and can be located both on- and off-campus. This type of accommodation offers many conveniences for students, including furnished premises, proximity to campus, relatively cheap rent and frequent catering facilities as well as access to other amenities and services. Most university campuses have associated residences. Information on this type of accommodation can generally be found by contacting the university's Student Housing Office on campus or on the university’s website. Be aware however, that the demand for this type of accommodation often exceeds the total availability.

In every city, there are numerous rental housing options available to residents. Where an individual ultimately chooses to lives is choice based on lifestyle, location and cost.
October 5th, 2007 at 12:12:25 pm by the myhood.ca team

How Much Can You Afford to Spend on Your Monthly Rent

When figuring out how much you can afford to spend on your monthly rent for your new apartment, there are three main costs which you must consider:

 1. Start-up costs,
2. Periodic rental payments, and
3. On-going living expenses.

You will need to work out how much you can afford to spend on all three of these costs. Failure to do this could see you miscalculate your total expenditure and blow your budget. For example, you may spend money on furniture and the first and last month's rent only to find you cannot afford to buy food.

You need to consider how much you can afford to spend on rent each month. The rule of thumb is that your rent should not exceed one third of your total gross (pre-tax) income. If you want to be conservative, ensure that it doesn’t exceed one-third of your after-tax income. As well, your total rent includes all utilities you have to pay. Utilities typically include hydro, water and heat. You’ll need to make the decision whether you can afford other discretionary “utilities” like telephone, internet and cable.

You’ll also need to consider your living expenses. The obvious ones include food – both groceries and eating out, transportation, entertainment and clothes. Make sure you allow for unexpected expenses, like flu medication or car repairs. Perhaps even allocate another 10% of costs to ensure you have these extra costs covered. You may also want to allocate some funds for your savings in general, or towards a certain item like a vacation. Note that there are some great automatic savings programs through the virtual banks, ING Direct and PC Financial.

Now, determine how much you are likely to spend on start-up costs. These could include:
  • First and last month’s rent (upfront);
  • Movers;
  • Connection to services, e.g. telephone, cable, hydro;
  • Furniture, e.g. bed, couch, table and chairs;
  • Kitchen utensils, e.g. cutlery, cooking pans; and
  • Linen, e.g. towels, sheets.

Do you have access to sufficient savings to pay for all these items? If not, then keep in mind that many of these items could be borrowed or bought second hand (check out Craigslist or Kijiji ) to save money. Family and friends should also be your first stop for contributions.

As you are spending a significant portion of your monthly income on rent, other than a roof over your head, you should also figure out what you need in return for your monthly rent payments. First, decide what you need to have as part of your “rental package”, like size of the apartment, number of bedrooms and any features you can’t live without (i.e. air conditioning?). Next you’ll need to figure out what’s nice to have. The key here is figuring out what you’d be willing to do without to ensure that you get what’s most important to you. Could you forego onsite laundry or a gym to have air conditioning?

In the end, you get what you pay for, so be reasonable – if you can’t afford much, don’t expect to live in a high-end luxury Toronto apartment with all the amenities in return…
September 24th, 2007 at 5:55:16 pm by the myhood.ca team

Why Rent: Renting an Apartment vs. Buying a Condo

It's the classic question, "should I buy or rent?"

It always seems that the answer is buy! And fair enough, you know the reasons to buy, building equity through home or condo ownership vs. “throwing your money away” if you rent.

Well, the team at myhood.ca decided that it’s at least worth your time to understand the other side of the coin – why rent? And there are some compelling reasons:

Location: One of the key benefits of renting is location. Many rental units are available in prime areas of the city, right where the action is and would otherwise be really expensive to own a place. Also take into account the cost of commuting to work. Often rental properties are more central for jobs, amenities and transit than homes in suburban communities and thus would save you money and time.

Flexibility: There are times in your life (which may be all the time), where you aren’t ready to settle down or be locked down – especially with a costly mortgage that comes with home or condo ownership. When you rent, you can pack up and leave at the end of your lease, without having to find a buyer and wait for the sale to close.

The Social Factor: If you’ve recently moved into the area or are just looking to meet some new people, one great way is moving in with roommates. Plus, living with roommates is cheaper as you not only split the actual rent between the group, but also utilities and possibly groceries.

Savings: Renting leaves you more disposable income for things like travel, recreation or just saving for a down payment on a home. When renting you also don’t have the costs of home ownership including interest on your mortgage, taxes, insurance and maintenance. Interestingly, many people say paying rent is like throwing money away. However, if you plan to move in the next five years, you could say the same about a mortgage. In the first five years of ownership, most of your mortgage payments are applied to interest, with minimal paid to the principal. So you won’t get this money back when you sell, and you’ll have all the hassles and costs of putting your house on the market.

Simplicity: Compared to owning a home, rental living is easy:
  • Property staff to call if anything goes wrong
  • Full-time maintenance staff to handle maintenance and repairs
  • No snow shoveling or lawn maintenance
  • No worries when you go away on vacation
  • A single monthly rent cheque pays for all of the above – compared to many separate bills with home ownership or a separate condo fee

There’s no right answer as to whether you should buy or rent. However, there is an easier answer – renting. The worse case scenario is that you rent an apartment for a year and when your lease comes due, you buy a place. As such, if you’re not at a point in your life where you’re ready to buy, then simply rent and you can re-evaluate the buy decision at a later date.
August 13th, 2007 at 4:26:54 pm by the myhood.ca team