Top 7 Pain-Points of Renting an Apartment
It could be argued that renting requires limited upfront capital when compared to homeownership as well as the freedom to move-on risk-free at the termination of a lease (no home selling required). However, there are many pain-points to be aware of when renting. Here are some reasons renting can be cumbersome.
Finding the perfect rental property is exceptionally gratifying, but how would you feel if you found out 20 other parties also had interest in the same property? According to CMHC, vacancy rates in Vancouver are among the lowest in the country at 0.7%, after Victoria (0.5%), Abbotsford (0.5%), and Kelowna (0.6%). As vacancy rates are extremely low, higher-than-usual demand is the norm for most rental listings. Taking the time to schedule a viewing appointment that suits your schedule might mean missing out on the property altogether. It is important to be ready at a moment’s notice.
Also, with numerous interested parties, the landlord has the right to choose the best tenant. In this case, they might consider someone with the best prior references, making it very challenging for those looking to rent their first home. Some tenants are forced to submit numerous rental applications, rarely securing their first choice, before they finally find a property.
The lack of available properties makes it easy for landlords to demand sky-high rent. High rent might mean you are required to consider less-than-desirable neighbourhoods. Also, to suit your budget, the rental property might be much, much smaller than you hoped. Or, in some cases, individuals secure roommates (against their preference) to offset the rental cost.
Homeownership does not necessarily guarantee appreciation or forced savings either, but rental is sure to flush your savings away. Renting tends to benefit the landlord first. In most cases, tenants leave a property with no financial benefit when compared to ownership.
One benefit of renting is that the home maintenance is the responsibility of the landlord. Home maintenance left to someone else is fantastic, providing they’re reliable. For example, calling the landlord when the dishwasher stops working, requires the landlord to fix it. But, what happens if the landlord doesn’t show, or takes a month to make the repair. Finding a good rental space is one thing, but ensuring the landlord is reputable is something entirely different.
In many cases, a one year lease is signed by a tenant and landlord. At the end of a one year lease, many leases roll into a month to month. While this type of lease is beneficial in that it enables a tenant to give only one month’s notice, it offers the landlord the same right, resulting in a high degree of uncertainty at the end of the first year. Also, landlords who choose to put their homes for sale create disruption in the form of buyer showing appointments, and the potential to evict the tenants (under certain conditions) if the new owner plans to move into the rental.
Rent increases can be imposed every year, up to a maximum percentage that varies every year. The maximum allowable rent increase for 2018 is 4%. For example, if you’ve signed a new 1-year lease on March 1st, 2017, at $1,500 per month, your landlord can increase your rent on March 1st, 2018 by 4%, an additional $60, to $1,560 per month. If you’ve signed a fixed-term lease for 1 year, your landlord can increase rent more than the maximum allowable limit with a brand-new lease. New legislation proposed by the BC government wants to close a loophole that allows landlords to create a fixed-term lease to bypass the annual rent increase maximum by flipping tenants and imposing larger rent hikes between leases; however, this rule has not yet been passed.
Have a pet or think about getting one? You might want to reconsider. When looking to rent, a pet will further dilute your rental choices. Many rental properties prohibit pets or permit only a certain number and/or size. With such limited options, a pet can make sourcing a rental home even more challenging.
It is true that renting has its place; requiring little cash upfront and the allowing freedom to move-on, but as outlined above, there are many stumbling blocks to consider. When faced with the choice, homeownership could be a better consideration.