“We are getting into an affordability squeeze, so it’s important that owners and builders of properties focus on spending their money on the stuff that really matters.”
That’s how Amy Erixon, Avison Young’s global investment management principal and managing director of investments, introduced her presentation on the 2018 “Canadian Multi-Res Tenant Rental Survey” at the Canadian Apartment Investment Conference at the Metro Toronto Convention Centre on Sept. 5.
The third annual survey was powered by Yardi, which specializes in property management software and asset management solutions.
The survey presented data to help future-proof buildings, anticipate renters’ desires, and see what they would pay more for. It was analyzed with owners, lessors, city planners and operators in mind to assist them in understanding how tastes are changing and what can be translated into a competitive advantage.
More than 12,000 renters completed the survey — with the biggest representations coming from Toronto, Edmonton, Ottawa and Calgary, and smaller response numbers from more than 18 other Canadian cities.
What renters want, don’t want, and what they’ll spend
The top 10 features renters either deemed essential or nice to have were, in order: soundproof walls, 90 per cent; washer in unit, 90 per cent; patio or balcony, 89 per cent; high-speed Internet, 89 per cent; guest parking, 89 per cent; abundant natural light, 88 per cent; air barriers, 88 per cent; parking lot, 84 per cent; elevator access, 83 per cent; and washer/dryer in building, 82 per cent.
The 10 features renters considered to be least important were, in order: valet parking, 87 per cent; dog grooming, 86 per cent; dog treats in lobby, 84 per cent; dog walking, 82 per cent; dog washing station, 81 per cent; colour-changing LED lights, 80 per cent; electric car charging station, 79 per cent; toddler/family room, 78 per cent; car sharing, 77 per cent; and business centre, 77 per cent.
Here are amenities renters are willing to pay more for, and how much they’re willing to spend per month: in-suite laundry, $25 to $38; kitchen renovation, $19 to $30; bathroom upgrade, $22; new building, $21; hardwood floors, $20; designated parking spot, $18; smart thermostat, $17; stainless steel appliances, $16; and a common area, $12.
Importance of bedrooms and bathrooms
Forty-nine per cent of survey respondents lived in units with two or more bedrooms.
“Those numbers are a lot higher than people think,” said Erixon. “About three-quarters of what we’re building is one-bedroom or studios, whereas half of all the renters are looking for larger units.”
While 75 per cent of renters said the number of bedrooms in their unit met their needs, nine per cent said they wouldn’t pay for an extra bedroom, 23 per cent said they’d pay $100, 12 per cent said they’d pay (either) $50 or $200, and 10 per cent said they’d pay $150.
Twenty-two per cent of renters lived in units with two or more bathrooms. Forty-one per cent wanted one full bathroom and one powder room, while 36 per cent wanted two full bathrooms and 24 per cent didn’t care whether they had two bathrooms.
Thirty-four per cent of renters said they wouldn’t pay more for an extra bathroom, while 38 per cent would pay $50 to $150 a month, nine per cent would pay $25 to $50 a month, and five per cent would pay more than $300 a month in rent for one.
Twenty-four per cent of renters said an en-suite bathroom was essential and 54 per cent said it was nice to have, while 42 per cent would pay extra for an en-suite.
Balconies, patios and building certifications
Forty-six per cent of renters said a balcony or patio is nice to have, while 43 per cent said it’s essential and they wouldn’t rent a unit without one, and 11 per cent said it didn’t matter. Forty per cent wanted a private balcony, 39 per cent liked a shared space but preferred a balcony, 15 per cent didn’t care and 5.5 per cent preferred a shared space.
Twenty-five per cent of renters would pay up to $25 a month more for a patio or balcony and 25 per cent would pay $25 to $100 a month for one.
“Whether people use them or not is sort of irrelevant,” said Erixon. “People really want them.”
Seventy-five per cent of renters said while energy certifications are good to have in a building, they weren’t willing to pay more for them, which Erixon said was a reflection of the issues many renters face with affordability. However, a surprising 9.5 per cent of renters were willing to pay from $101 to more than $500 per month more in rent to be in a building with an energy certification.
Locations and parking
In order of preference, location-wise, renters want to live near: grocery stores; outdoor spaces and parks; bus stations; retail and restaurants; and close to work.
Thirty-four per cent of renters preferred a unit in a new purpose-built rental, while 24 per cent preferred a house or townhouse and 14 per cent preferred a condominium.
“That’s bad news for condo rental speculators,” said Erixon, who noted just nine per cent of survey respondents lived in rented condo units.
Fifty-eight per cent of renters had one car, while 29 per cent had none, 12 per cent had two and one per cent had three.
“If you’re working in a zoning area where you’re required to provide one car per bedroom, chances are that you’re over-parking your building,” said Erixon. “It’s one of the cheapest ways that we can reduce costs and help with the affordability issue.”