For years now, rental properties have been a popular way for investors to enter the real estate market, and despite the continued increase in property values, they still remain a very attractive purchase. In fact, recent data has shown rental units to be as good of an investment as ever due to rising rental rates.
Statistics Canada recently published that average rent increased by nearly 1% in the month of January alone. Using a new method for measuring the cost of rent as part of the Consumer Price Index (CPI), StatCan has assured this is not an error, and that this new method is simply more accurate than before.
The rapid increase may seem counterintuitive given the enactment of further rent controls over the past few years in Ontario. The rise however likely comes as a result of the increase in purpose built rental units, and thus an influx of new properties to the market.
Also part of the rising rental costs could be the recent documented decrease in home purchases as a result of stricter mortgage rules, among other things.
As people get shut out of home ownership options, more demand is shifted to the rental market.
Getting into the rental property investment market may seem like jumping on a moving train, but the numbers don’t lie. With Toronto at the top of the list of rent prices, this may be the time to consider diving into market.