Southern investors driving up rental prices in Greater Sudbury
‘When they buy property, they are also investing in renovations from the ground up, taking homes that have maybe been neglected by previous owners, and bringing these units back to life’
If you’re in the market to rent in Greater Sudbury, you may have been shocked to see units renting for much more than you bargained for.
Quick searches on sites listing local long-term rentals reveals rental prices that are leaving Sudburians questioning the sanity of those posting the units for rent.
For example, a search of long-term rentals on Kijiji results in a multitude of apartments and homes for rent, with rents varying vastly from location to location. But, as an example of some of the rental units listed at the higher end, a 1,000-square-foot two-bedroom house in the city’s West End is renting for $1,800 a month, including water.
Another listing in New Sudbury has a 750-square-foot two-bedroom apartment on Lasalle Boulevard renting for $1,700 all utilities included.
On the lower end of the rental price spectrum, a 525-square-foot bachelor apartment in the area of The Kingsway is listed on Kijiji at $795, all utilities included.
Meanwhile, there are homes and apartments listed on Facebook’s Marketplace that also have a wide range of prices. Some are very affordable, while others are listed at $3,000 for a four-bedroom, two-bedroom apartment, or $3,300 for a four-bedroom house. Another three-bedroom house with two bathrooms is listed for $2,500.
There’s an easy explanation, said Sherry Jordan, a licensed property manager and vice-president of the Greater Sudbury Landlord Association. Investors, many from Toronto, are buying up property here in Greater Sudbury, fixing up the units and raising rental prices.
Jordan said she manages more than 200 units. More than 80 per cent of her newest clientele don’t even live in Greater Sudbury.
“They find the market (in Greater Sudbury) more reasonable than where they are right now,” she said.
Exacerbating the situation is the fact it’s a seller’s market right now, meaning these companies are paying more than asking price for the property they are purchasing, she said. Many of them are also investing a lot of money to renovate and fix units that have otherwise been neglected..
“These southern investors, when they buy property, they are also investing in renovations from the ground up, taking homes that have maybe been neglected by previous owners, and bringing these units back to life,” she said.
These out-of-town investors aren’t new to Sudbury, Jordan said. The Toronto market got to the point where it was unaffordable, and Sudbury is only a four-hour drive north. These companies hire property managers, such as Jordan, to handle the day-to-day operations.
Further adding to the increase in rental prices is the fact there are far fewer units available than those looking to rent. The vacancy rate hovers around two per cent in Sudbury, Jordan said.
Of the 200 units she manages, only eight are currently available for rent on her website, sudburypropertymanagement.ca, as of March 11.
“It’s limited, and of course, it’s demand and supply, just like everything else,” she said. “There is not a lot to choose from in terms of rental units.”
Local landlords can take advantage of the situation by keeping their rents lower than what these southern investors are charging, Jordan said. The southern investors seem to be listing their units with Toronto-level rent prices, and don’t seem to realize what rent needs to be here to be considered reasonable, said Jordan.
Location is another factor dictating rental prices, Jordan said.
For example, a two-bedroom apartment in New Sudbury would rent from anywhere between $1,200 to $1,500, depending on if utilities are included.
In comparison, in the Donovan, a typical two-bedroom will range from $900 to $1,300. The Donovan is mostly renters, said Jordan. Most people who buy property in the Donovan don’t actually live in the Donovan. They are buying the property as an investment.
“Many southern investors are buying up the Donovan and fixing up these places and increasing the rents on them,” said Jordan.
The high rent prices have met with some criticism online, but the reality is, these units are either going to sit empty, because Sudburians just aren’t willing to pay those prices, or they are going to have to decrease their rent prices, said Jordan.