So you want to move out or move on, and you don’t have the money to purchase a property right now.

Renting will cure what ails you!

But just because renting costs less than purchasing doesn’t mean there are any fewer considerations…

I would estimate that majority of my clients who come to me looking to lease a property fall into one of two categories: 1) young people looking to move out of their parents’ house or 2) people moving into the city of Toronto.

I also find that these young people who come to me with a gleam in their eyes and a million-and-one ideas about what they want to find are completely out of touch with the current state of real estate in our city.  And by “out of touch,” I mean that they never had a clue to begin with.

I had a girl tell me last week that she wanted a 1-bedroom condominium with “all the bells & whistles,” ie. pool, gym, rooftop terrace, etc., but she wanted it for under $1000/month!

If you’re looking to rent, and you are either a complete rookie or a seasoned veteran, it still pays to start from the beginning.

I recommend evaluating the following four criteria, in order:

1) Roommate.  First and foremost, will you be sharing your residence with another person, or perhaps more than one person?  There are pros and cons, but the most important advantage is cost.  Let’s assume that a 1-bedroom condo at 123 Fake Street is $1450/month and a 2-bedroom condo is $1850.  Clearly, it costs you an extra $525/month or 36% more rent to live alone than with a roommate.  Living alone is a luxury!  If you have a close friend who is also looking, perhaps you could save in the neighborhood of $6000 over the course of a year by living with that person.

Of course, there are disadvantages as well.  A close friend of mine wanted to rent an apartment with his friend “Krista,” and he met with me to sign the papers.  I asked him where Krista was, and he said, “Oh don’t worry, she doesn’t need to sign.”  I warned him about the scenerio whereby she could up-and-leave since she wouldn’t named on the lease, and he said, “Hey!  Krista is a very close friend of mine.  I trust her emphatically, and she would never do that to me.”  Well, I’m sure you can guess what happened only three months into the lease…

If you and four of your buddies want to rent a 5-bedroom house and pretend you’re in university again, ask yourself if you’re ready to go back in time.  I’ve witnessed many friendships become strained after three of the five lessees decided to act 22 years old, while the others acted 30 years old.  Less is usually more…

There are numerous other pros and cons, but the main consideration is the cost.  If you are looking to get out of your parents basement, perhaps $1200 – $1500 is too much right off the bat.  You might need a roommate.

2) Freehold or Condominium.  I find a lot of people who come to me looking for a condo end up with an apartment in a multiplex building, and the reason always comes back to price.  Simply put, condominiums are newer, nicer, and have more amenities than apartments.  By “freehold” I mean anything from a detached house to a townhouse, to a basement apartment, to a unit in a duplex, triplex, fourplex, multiplex, or high-rise apartment building, but NOT a condominium.

The main drawbacks to freehold apartments have to do with the condition of the units and the age of the building.  Picture parquet floors in the living room, old single-pain glass windows that have been painted over and don’t open, and of course kitchen which is either wooden cottage-style cabinetry, or bright white with wooden strips, such as below:

If you’re looking for “new and updated,” you probably won’t find it with a freehold apartment.

If you’re looking for “much more affordable than a condo,” then you might have found your next home.

Freehold apartments also offer better areas and neighborhoods quite often because there may not be any condominiums in the area you’re looking at.  For example, Millwood Road just north of Davisville Avenue in the “mid-town” area is home to an arsenal of fourplexes, many of which rent for around $1400/month for a 2-bedroom with parking.  On the west end of the strip, you’re a step from vibrant Yonge Street, and on on the east end of the strip, you’re right next to the park.

Freehold apartments offer the lessee a compromise, but definitely a value proposition.

3.  Price.  I really think that the price is determined by whether or not you have a roommate, and whether you want a pretty new condo or an affordable apartment.

The largest consideration with price is parking, since a parking space with a downtown Toronto condominium will run you an extra $100 – $150 in your monthly rental cost.

At the current moment in “C08” district (bordered by Yonge/Bloor/DVP/Waterfront), there are 75 condominium listings for lease.  Let’s use this data to analyze price, keeping in mind that this isn’t Yorkville, but it isn’t Scarborough either.

The average price is $2,189/month.

The average price of a 1-bedroom is $1842/month (median price $1680), out of 39 total units, only 17 of which have a parking space.

The average price of a 2-bedroom is $2454/month (median price $2200), out of 29 total units, 22 of which have a parking space.

4. Amenities & Features.  What do you want and what do you need?  A 2-bedroom condo with only ONE bathroom as opposed to TWO will save knock $150 – $200 per month of the rental cost.  A building with a fully-equipped fitness facility and swimming pool will add a back that $150 – $200, as would the aforementioned parking space.  If you’re desperately trying to work with a small budget, the old adage “beggars can’t be choosers” seems to fit, and perhaps you can’t turn up your nose at anything that isn’t an “authentic loft conversion.”

Analyzing those four points in order (Roommate, Condo vs. Freehold, Price, Amenities & Features) should at the very least get you started.

There are many more considerations, but when push comes to shove (and it usually does), most people don’t find their “perfect space” that they’ve created in their mind because it doesn’t exist at the price they envisioned.

You may only be there for a year, and in the grand scheme of things, it’s better to save over the course of that year in order to splurge down the road…