Tariffs and the rental market?
The economy is always challenging even in good times. When slower times occur, businesses have to adapt to the situation. Operating a rental property is owning a business. The recent challenge to the economy is the tariffs being threatened and applied by the US on Canada, Mexico and other countries. How could this affect the rental market in BC.
The tariff threat is causing uncertainty in the economy on both sides of the border, which often leads to people holding off on spending. The rental market and the housing sales market are interlinked and affect each other. When the sales market slows it creates a depressed rental market, and when the sales market is active it creates a tighter rental market.
For the past year and half we have seen a slow down in the sales market which is creating a large supply of rental properties. With greater supply and lower demand it is important for landlords to ensure their product is to current market expectations. We are in a tenant favourable market which allows tenants the opportunity to take their time to view multiple properties and decide which one is right for them. They also have the ability to negotiate the rental prices.
What can a landlord do if their unit is vacant? If you are not in an immediate need to rent the unit this may be a good time to take it off the market for a month or two and complete some upgrades to the unit. How old is the carpet, hard surface flooring or appliances? When was it last painted? Is there anything else that could be upgraded to make it more appealing in the current rental market.
If your unit is currently rented and is at a higher rental rate or close to the current advertised rental rates and your tenant asks for a rent reduction we recommend negotiating a new lease term for your tenant. Current market conditions are causing longer times to find a new tenant for the vacant unit. We are experiencing a minimum of three months to find a tenant. Why is it taking so long?. If a tenant in BC is looking to move they need to provide a calendar month’s notice to their current landlord. That means if they are looking in March then they would need to give the month of April for notice and would be available for May to start a new tenancy. Patience is important in these rental market conditions.
Need help managing your investment properties. Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
