The pandemic sparked an economic change across the world, and here in Canada the real estate and rental markets have changed dramatically. The change has been positive for renters, and tougher on real estate investors and property owners. Recent data confirms what many Canadians have already noted – a dip in rental prices across the country, even in Canada's hottest rental markets.
"As demand fell faster than supply in the second half of March, rents experienced a slight decline," the CBC reports, noting that "the average monthly rent in the post-COVID-19 period decreased 0.7 per cent year-over-year."
The market was due for a correction, and as the CBC notes, the economic downturn exposed problems with the rental market, particularly its high dependence on borrowed money. The good news is that the lull in Canada's housing demand is expected to be short-lived. In the meantime, the pandemic has provided a much needed correction to the cost of rent. This is a welcome change, especially considering that rent has taken up an unsustainable percentage of the total monthly income of young workers across the country.
The Impact on Homesharing
The shift in rent is especially important for homeowners considering opening their home to a home share arrangement. Whether the arrangement takes the form of a supplemental income or a task-exchange, it's important that the price charged is competitive.
Homeowners must maintain a balance between offering a housing arrangement that is competitive enough to attract good housemates and one that is also profitable. For this reason, it's important to have a strong understanding of the rental market.
Here are some tips to consider when determining a fair amount to charge:
Start by considering your goals. If your goals are primarily financial, then consider how much you will need to charge at minimum to break even or make a profit. When considering this calculation remember to include an inventory all your current housing-related expenses.
Research average rents in your area. When doing so keep comparable amenities in mind. For example, do you offer a parking space or storage?
During your research, consider that rent in a condo or apartment complex may include access to amenities like a swimming pool, hot tub, sauna, or exercise room.
Again, begin with your goals. Are you looking for help with the finances, help around the house, assistance with maintaining your property, etc.
If your goals are primarily financial, then consider how much you will need to charge at minimum to break even or make a profit. When considering this calculation remember to include an inventory all your current housing-related expenses.
Research average rent in your area. Again, when doing so keep comparable amenities in mind.
Make a list of the tasks you would like included in your task exchange arrangement. Consider the amount of time each task will take and calculate, at an hourly rate, what that task would cost over the course of a month if you were to pay someone to do it.
Next, take your rental research and deduct from it the value you've assigned to the tasks you'd like completed. This will give you a better idea of what, if anything, to charge for your task exchange arrangement.
Remember to ensure that the amount you charge is affordable and realistic for both you and your potential housemate!
Still unsure? Give the team at HomeShare Alliance a call. We'll help you along your home share journey from valuing to marketing your property and finding a housemate who is the right fit for you and your lifestyle.