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Will cottages become a hot commodity this summer? How the Pandemic has reshaped the Rental Market

May 28, 2020
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Will cottages become a hot commodity this summer. How the Pandemic has reshaped the Rental Market. What has changed because of the Pandemic?

Rob Golfi: [00:00:00] Welcome to the Hamilton real estate show with Rick Zamperin and Phil Golfi.

Rick Zamperin: [00:00:03] Good Saturday morning. Once again. We are two months in now? Still physically distancing. I’m in the CHML studios. Rob Golfi. Phillip Golfi sales representatives with Remax Escarpment Realty, The Golfi Team.

You guys are stationed at the office?

Rob Golfi: [00:00:20] Yes, we are.

Rick Zamperin: [00:00:21] We’ve got our own little studio now. They’re coming to you live from the Golfi Team podcast studio on the top floor of our Markland office. It’s newly constructed. This is our first show with it.

Rick? I think if you came here and saw the system, I think that chorus radio CHML would be very impressed. All right, we’re, we’re all in. Hey, you can go online and get all in on the real estate market. robgolfi.com is the website. Call them whether you’re buying or selling or just thinking about  making your next move. The number (905) 575-7700. During the COVID 19 pandemic, the Golfi Team is practicing safe business, so they’re all in on virtual tours. They will Skype you, they will go on FaceTime, they will call you, they will text, they’ll get ahold of you and make sure that the communication is flowing back and forth in a very safe manner. They’re all over social media, Facebook, Twitter, Instagram. The handle is @robgolfi. If you have a question for the Golfi Team, or you would like us to discuss a certain topic that you have in mind, send us an email. questions@robgolfi.com is the email address. questions@robgolfi.com and if you’re into podcasts and who isn’t these days, download the Hamilton Real Estate Show podcast wherever you get your favorite podcasts.

So two months in. How are you guys doing? How are you coping?

Rob Golfi: [00:01:47] We’ve done a lot of things in the last two months. We’ve implemented a lot of things with our business.  We’ve changed a lot of things. So when we come out of this COVID, Our business has totally changed. We adapted really quick with the times we looked at the best technology that that’s available out there that, we can use to sell homes.

And we’ve implemented them and it’s working. It’s working. We’re finding things in May are a little better than they were in April. April was a tough month now in May, things are picking up and it looks like things are going to start turning around.

Hopefully June is better. We are going to be able to be mobile and were not going to be quarantined in June, especially because we don’t have much of a summer in Ontario. So things are going well. We’ve done a lot of good things in our business.

Rick Zamperin: [00:02:50] Phillip, has there been any point within the last two months where you’ve said to yourself, why haven’t we done this before because it’s working so well?

Phil Golfi: [00:03:03] There’s been a couple of things that have come up that. We’ve talked about doing, we planned on doing, we’ve had the right framework and the right presentation to do, but it’s just we haven’t had the time or I guess it’s an excuse.  But when you need to fill up your days with something, you find to get back to those things that you’ve overlooked for the past six months.

So, just organically we were forced into a position to do some things that we were uncomfortable with doing before that seem normal now. For example, going live on Facebook and going live on Instagram is something that, you know, we didn’t feel comfortable doing it. Something that we didn’t do often.

But in today’s day and age, it’s something that we continue to do every single day. Whether it’s virtually showing a property or showcasing a property or having an interview with another community leader that you know, heading a food bank or things of that nature. This is something that we do daily now, we do these things. I remember my dad talking one time, he’s like, I’m all zoomed out. He’s like, I’ve had, you know, six or seven zoom meetings today. All of a sudden he didn’t have to leave his office. And it’s just, that’s the new normal for us, right? It’s the new normal for us to do a virtual home evaluation.

I had an in home evaluation. The house was in St Catharines. I was in Grimsby and the seller was in Toronto, and we’re all talking about this house that we’re planning to put up for sale  in St. Catharines. It’s a new way of doing business and it’s going to become more normal now. But it’s made everybody more efficient and most importantly, safer in today’s day and age its the safer way.

Rick Zamperin: [00:04:48] Now that Ontario is in a stage, one of its covered, 19 reopening plan, most notably some businesses with street entrances are allowed to reopen as long as, you know, those physical distancing measures are still being adhered to.

Now that we’re in stage one, are we seeing more interest in the real estate market? Rob. Yeah. I say so the people that were sitting on the fence that were going to put their house up for sale or buying a house, that were necessary to do so, they’re, they’re coming out more now. There is a certain percentage of people that are still waiting to see what’s going to happen.

But we’re going to see that they’re opening up more and more as each month goes by. But yeah, definitely. We’re noticing a difference. There’s no doubt about it. Great article that you forwarded to me this morning. Headline, how the pandemic will reshape the rental market. And, this is some input from rentals.ca which says it has experienced, it’s all time high in traffic numbers in the first week of May. Searching 59% compared to the first week of April, and renters who put off moving when the pandemic hit are now starting to resume their apartment search in the hopes that Canada’s lockdown will end in the coming weeks.

So from a renter’s perspective, are you getting more calls? Is there more interest or more talk on the street?

Rob Golfi: [00:06:14] Yeah, there is. There are more and more people are looking now and more people are putting.  Their places up for rent, that had vacant units, or they, they bought in the or bought it as investment.

So we’re, we are finding that, you know, people are starting to go up there. They’re, you’re feeling you don’t want, we’re, we’re in a comfortable zone right now. People feel confident in their health, especially the younger generation.  We went through this scary moment in the middle of March, and in all of April, you know, we had all this big fear with the news and people were passing away and especially watching the U S news. And so there was a scary moment, but now people are like, you know, Hey, wait a minute.  I’m not feeling that – I’m going to start going out a little more.

And I saw it like on this, that last Saturday, Rick, the Queen Elizabeth Way going to a Niagara Falls.  It was busy. It wasn’t busy like it normally is, but it was busy. And so we’re seeing people, and last Saturday was a beautiful day, and we’re seeing people coming out now. They just want to get out.

They want to do things. And they just. Yeah. But there’s nowhere to go. Like, I mean, they’re just, they just want to drive around. It doesn’t want to, you know, get out of the house, do something. So people are getting more comfortable getting away from the house and doing things. And, you’re going find that happening more and more as time goes on.

And, and, and the Ford government is probably going to have to open up things. Now. W what I, what I just read in the news yesterday is that – you cannot get the virus by touching something.  You get it by talking to somebody when they’re, you know, cause sometimes there’s a little droplets from a person’s mouth that might hit the person in front of you.

So that’s how you get it. You won’t get it going. Grocery shopping, touching the shopping cart. That’s what was in the news yesterday. So if once they open that up and say, Hey. We, everybody should be wearing masks. Don’t worry about the gloves. Don’t worry about. You know, going shopping, we can touch anything we want.

Just if everybody wore a mask, I think we can open up everything, but we’ll find out. I mean, we’ll find out what the, what the scientists and the doctors are going to say in the next couple of days. And hopefully, hopefully things turn around. Interesting findings from this rentals.ca article, in terms of what renters care about.

And this was compared from April at the height of the fear over the pandemic compared to January in which, you know, I think most Canadians weren’t that fearful of contracting coronavirus it was mainly a you know, an epidemic at that point in China.  And it had hit few other countries around there. But, what renters care about April versus January is, is, is really interesting because things like public transit. Quietness, nightlife, all those things really did not interest would be renters. They were more interested in being around elementary schools, grocery stores, cafes, interestingly enough, as well as pedestrian and cycling friendliness.

Any thoughts on those categories there? Yeah, a lot of people are changing what their needs and wants are for rentals.  Because of this whole epidemic people have changed. People have a different outlook in life right now. So you’re going to find people looking for different locations of where they might rent.

They might’ve wanted something before, that you know, was more lifestyle. Now they want more calmness. They want maybe a little bit more space. It’s definitely changed everybody’s way of life. There’s no doubt about it.

Rick Zamperin: [00:11:06] This is the Hamilton real estate show on 900 CHML. Rick for an in studio today on the line, once again, Rob Golfi and Phillip Golfi sales representatives with Remax Escarpment Realty. The Golfi Team, you can get them on Twitter, Instagram, Facebook. The handle is @robgolfi. Call the office (905) 575-7700 online at robgolfi.com

We were talking  about rental.ca. which put out some statistics in terms of what renters care about. From January to April and it and it is quite different than it used to be…public transit way down. Quietness, nightlife, near daycares or shopping down, but increases in apartment vacancies near elementary schools, grocery stores, cafes and pedestrian and cycling friendliness, rentals.ca also with some predictions as well.

And we’ll go through some of these and get your thoughts on this. And Phil, we’ll start with you. Number one, more landlords and renters will embrace online virtual leasing 3d and virtual tours. We’re seeing that already in the housing market, will we see that in the rental market?

Rob Golfi: [00:12:54] I think we will see, some of it. It just depends on the cost for the realtors.

The 3D virtual tours…, we own our own virtual tour cameras. So it’s a lot easier for us to afford to do it for rental properties. But for a lot of people that don’t have that, it could be very costly and it, and it, it, it doesn’t make sense when it comes to adding that for other agents. They just can’t afford to do that.

So it just depends on who your agent is and who you know, who’s going to represent you when you want to put your house up for a lease. Another interesting one.

Phil Golfi: [00:13:36] So, you know, from my experience right now, I am in the position where I’m trying to lease or rent out one of my personal properties.

From, you know, people need to make a choice. And I think that that’s what the government’s doing is as we get back to normalcy here, the government’s going to put some a lot of us or all of us in a position where we need to make a choice. And that choice is going to be, if we’re going to go outside and we’re going to be susceptible to different situations where we can contract COVID.

But it’s not going to go away. As we continue to open up these stores and retail outlets and public facilities and things of that nature, the virus is still going to be around and people are going to need to make a choice, but it’s the type of choices that you’re going to make. For example, housing.

Everybody needs housing, right? Whether what if somebody wants to go lease a house or go buy a house? They need to get outside and go and go view it. And that’s just the reality of the situation. So the rental market right now in Hamilton….. there’s so few rentals available. I put up one of my rental listing and within hours I had 30, 40 responses.

It was incredible to see the amount of people that are looking to go rent out a space in Hamilton right now. And those people need to make a choice. If they want to go view the property, they, they understand that they have to go out in public and be susceptible to different situations where they can contract the virus.

That’s the reality of the situation. But these are people who are looking for housing, and it’s difficult to say, but that’s what it is. Prediction number two, and this is an interesting one. Some short term rentals in urban areas will convert to long term rental. So in short, the longer short term rentals in larger cities remain vacant.

Rick Zamperin: [00:15:27] The sooner the owners could put them back into long term rental stock because they just can’t afford the mortgages. So they’re going to convert those short term rental options to long term rental. Do you see this being a big move.

Rob Golfi: [00:15:40] Oh for sure. That those are the Airbnbs, the people that have the short term rentals that because everything has been shut down.

So now these people are not collecting any money on their Airbnb properties. So you’re going to see a lot of people saying, you know what? We’re not going to take this chance anymore. Let’s just get a tenant in there and just rent them to long term renters. And you’re going, you’re going see more and more of that.

And I wouldn’t doubt that a lot of people have already started renting out their Airbnbs as as long term rentals.

Rick Zamperin: [00:16:16] we’re going through some predictions from realtors.ca on how the rental market will change as a result of the covert 19 pandemic. And if, if anyone out there is listening who has some investment dollars, a cleaning company is probably a good investment cause prediction number three is —- cleaning will take on a whole new meaning.

In apartment buildings, it’ll become a bigger industry with stricter rules or guidelines on how to clean, what to use and how to stay safe while cleaning. This is going to be huge.

Rob Golfi: [00:16:48] I think there is a company out there, I don’t have the name of it. ….they will come into a house or an apartment or whatever and give it a full cleaning.

There’s a guy that I know…what they do is that they spray stuff on all the carpets and apparently it will kill any viruses throughout your office or your home. And it just kills everything. They spray it in the air and anything from the handles.

They spray the rails of your stairway, staircase, anything. It’ll kill any viruses around. So, I mean, if you have that done once a week, you have a really good disinfected, house so that no viruses are carrying throughout the place You are definitely are going to see companies opening up.

You’re going to see commercial companies opening up. This is something that cleaning companies will add to their business or new businesses will spring up from from this. There’s no doubt about that.

Rick Zamperin: [00:17:53] Number four…more claims will flood the tenant landlord board. So once the coronavirus war ends, the landlord tenant war could escalate and play out in tenant landlord board hearings, and maybe even more litigation.

And those tribunals are already overloaded and backlog. So this, this is going to get worse.

Rob Golfi: [00:18:11] Oh, yeah. There’s a, there was probably. Right now you know some of the renters that are not paying their rent…. they’re just loving this because you can’t evict them right now. And they’re basically just taking advantage of the landlord.

So then when you do put a claim in to evict these people, it could take another three to five months. So somebody may take advantage of a landlord and take them for maybe six to nine months of nonpayment of rent. I mean, it’ll catch up to that guy eventually it, yeah.  You’re going see the rental tribunal flooded. They are going to need to hire more people to handle these claims. I hope they do that so that landlords don’t go broke trying to rent out to bad tenants.

Phil Golfi: [00:19:03] The disappointing thing is.

Even prior to the pandemic. These claims and these cases were already flooded. There was already, prior to the pandemic, multiple cases and articles of people constantly complaining about the processes of evicting a tenant. And even prior to the pandemic, Doug Ford even came out and said, this is something that we need to fix.

This is something that we need to tweak. It’s something that we need to work on. And I think this pandemic in the amount of cases that are going are going to arise because of a result of it, is going to put the government in a position to change and tweak the rules of the landlord tenant board.

And there they have to. They have to do something about it. It’s unfortunate for the landlords. There’s nothing that they can do. I’ve seen multiple people put in positions where their hands are tied and they have somebody that’s freeloading off one of their properties and taking money from them.

It’s stealing, it’s stealing it and they need to fix something and this is going to put them in a position where they need to fix it. And I understand that there’s people out there that are saying, well, what do you expect me to do? I don’t have a job. Well, there’s government support that’s there to help to be able to support you through the pandemic. And I’m not being insensitive to people that aren’t paying rent, but there’s landlords out there that are literally, you know, it’s a bottomless pit that they’re dumping money into a property that they shouldn’t be. And they’re not getting any help from the government and they’re not getting any help from the landlord tenant board.

So this is going to put them in a position where they need to do something. And, and there’s going to be a lot of landlords out there that’s going to put pressure on the government to see changes.

Rick Zamperin: [00:20:41] We are going through some predictions from rentals.ca in terms of how the pandemic will reshape the rental market. Prediction number five and this one too is interesting. People will not move as much in the short term, but expect a spike in the recovery. And it says, while more renters will be on the move, count on fewer homeowners making a move.

I don’t know. It sounds like to me that people who own homes or people are in the rental market are all going be in the same boat.

Rob Golfi: [00:21:24] It’s  hard to tell, what renters are going to do. I think everybody’s just going to stay where they are if they can afford it unless they need to move.

But there’s going to be a lot of shifting going around once we see what’s going on with jobs once everything’s lifted. Because turning the switch off is a lot quicker and it’s painful but quicker than it is to turn it back on. It takes time to get rolling again.

Just slowly you get the momentum going again. You know, businesses aren’t going to be all of a sudden opening up and it’s going to be, you know, Oh, we’re back on again.

So a lot of these renters, they may not be able to afford to move or they have to move because they can’t afford the property that they’re in or the rental. But what the problem here is the rental market is expensive in Hamilton. And it’s hard for anybody to afford.

In the last three to four years, we found that, you know, we had a flood of GTA buyers coming here, and these people, landlords were selling their property saying, Hey, I can get this much money for my house. I’m selling it. So now we’ve got a GTA buyer, so now that tenant had to move and find another place.

So he might’ve been paying 1100, $1,200 a month rent. Then he had to spike and jump up to paying, $1,700 a month rent. And so for a guy that has to jump from 1100 to 1700, that’s a hard hit for somebody that’s been renting a house for a long time and he had to leave and find another place.

It’s, you know, $600 a month increase –  out of his pocket. It hurts him. It hurts him. So, and it is tough to find a place to rent in Hamilton right now for a decent price. It’s tough. So people are scared to move. And if you have a landlord that needs to sell the property after a year, then you have to get up and move again, and it’s just, it’s tough.

It’s tough for landlords and tenant.

Rick Zamperin: [00:23:38] Rob, you mentioned pricing. That’s a great segue into prediction. Number six, rents could fall in the short term, and affordable housing will be even harder to find. So it says because of covert 19 Canada will have less immigration.

Fewer international students and with the border closed, not nearly as many seasonal and part time workers. All typically are renters, so with fewer renters and more supply rents could slide down over all this year, but the higher end of the rental market advertised as luxury rentals could be more effected with record number of layoffs.

There will be more demand than ever for affordable housing. So rents in the short term going down, very few affordable housing. This will have a a huge ripple effect on the rental market.

Rob Golfi: [00:24:22] Oh, absolutely. We’ve been immigrating probably over 300,000 people into Canada every year.

And that’s what’s keeping the rental market expensive. But now if all of a sudden, we open the doors of immigration again. It’s going to be a little slower… so we lost a two and a half, three months of immigration, and who knows how much they’re going to start back up and immigrating people. So now all these people that were coming in, the first thing that they did was rent a home, right?

So if they’re not coming in,  we may have an abundance of homes that are going to be empty. So that’s going to cause the rental market to come down a bit, but it’s hard to tell where where that’s going. Everything is going to be totally dependent on this Fall, Rick, where everything is going to happen with the rental market, the housing market, totally everything.

Rick Zamperin: [00:25:18] Last prediction, and we’re running out of time here. So I’ll get to a quick, Coworking spaces in apartment complexes could become the hottest new amenity. So with more people working from home, there might be an, obviously, there already is in some places a coworking area where people can go to work in their apartments as opposed to right in their personal units.

Rob Golfi: [00:25:40] So are you saying that they actually have a location in the apartment building as one of the amenities in the condo buildings?

Phil Golfi: [00:25:47] There’ll be a c coworking space. This will be increasingly popular. Especially in the new development space … computer rooms.

There used to be computer rooms and libraries and then nobody used them, so they took them out. And it wasn’t a really popular. You walk through some of the old condo buildings, it’d be like, Oh yeah, there’s a library or a computer room, and nobody even knows where the key is to get in. But now those will be converted back into coworking spaces with good wifi and access to printers and things like that.

It’s going to be another amenities that people are going to want and it’s going to attract buyers and people that I want to live with in that specific building.

Rick Zamperin: [00:26:30] It should be interesting, but we’ll get to a few other trends to consider. Post COVID 19 in terms of the rental market, when we return here on the Hamilton real estate show on 900 CHML.

rentals.ca has a host of predictions in terms of how the COVID 19 pandemic is going to affect the rental market. We went through seven of them. They also list a few trends to consider post COVID 19. Whether there’s a vaccine or we’re somewhat back to “A new normal”, these are some of the things that they predict and some of them very interesting and new way of living for seniors.

So senior housing buildings and units could be redesigned with new protocols on protecting them because as we know, this COVID 19 virus has affected seniors the most. The most fatalities are among the senior population. The dream of buying becomes more of a dream and the nightmare of COVID 19 could extend the trend of renters staying renters longer.

You guys foresee that? Those in the rental market right now are going to remain in that market because there’s so much uncertainty.

Rob Golfi: [00:29:05] Yeah, I can see that. And I, and I also see that they’re going to redesign senior housing. This totally changes everything in the world and how people are going live and what they’re going to look for to live in.

There’s no doubt about it.  We’ve created a fear amongst people. Even after all this is over when, there’s a vaccine. There is going to be a huge percentage of the population that are still going to walk in fear and they’ll have that for the rest of their life.

And they’re just worried about it. And that’s a sad thing about what’s happened with this pandemic and it could take another hundred years before people get comfortable again. Well, you know, the one before this was the Spanish flu in 1918.

And I wasn’t born then and my parents weren’t born then. They didn’t have the medicine, they didn’t have the technology. They didn’t have the communication that we have today. So it’s hard to tell what’s going to happen. It’s hard to say how people will react to COVID 19 in the long run mentally and physically. As we all know, we still can’t go out to a restaurant or our favorite nightspots to enjoy a drink or a meal.

Rick Zamperin: [00:30:45] So we’re, we’re going to the online route and getting food delivered to our homes and apartments. In terms of apartments. Will they have a designated area for a foods or goods exchange?

Rob Golfi: [00:30:59] Yeah. Like I said, a lot of different things are going come into play.

Phil Golfi: [00:31:05] One of the biggest things is the restaurant — the comfortability of going out to a restaurant as a society. And I think that there’s a lot of unanswered questions that we have right now. As soon as everything opens back up, how’s society going to react?

Are they going to want to run and chase like a bunch of Clydesdales and go out to the malls and go to the restaurants or are people are going to still feel uncomfortable in going in a public place and doing things of that nature. So it’s going to be interesting to just see how society reacts.

I mean, in two weeks from now, we can be sitting here and saying it’s back to normal…. The effect of a pandemic…. It doesn’t even really show, There’ll be some examples, for example, the sneeze guards at the grocery store, …. those will stay forever.

Who knows how we are going to react to, to coming out of the pandemic. And if that’s the case if there’s no signs of a pandemic, then you know, that’s the one of the best things for our economy. That’s one of the best things that could happen for our economy. It’s just that we got to get used to watching sports without any fans.

When we come

Rick Zamperin: [00:32:35] back, we’re going to talk about the cottage market and to how that may heat up as the months heat up. That’s coming up next year on the Hamilton real estate show on 900 CHML. The cottage market. We haven’t discussed this for a while, obviously because of the weather, but now that the weather is heating up a little bit some people might be interested in diving into that market. And there are some realtors out there, and I’m not sure if you guys agree or disagree, but they’re saying that although real estate has taken a big hit during this pandemic, cottages might be a hot commodity throughout the summer because urban dwellers.

Rob Golfi: [00:34:10] Want to get away from the city. They, they, they’re craving that personal retreat for them and their families. Do you envision this? I do because there’s, there’s still a lot of money out there. The people that can afford having a second home and having a cottage there they’re going to do it.

Like I said, they’re looking at life differently and there is a shortage of cottages for sale out there right now. So they’re holding strong with pricing. Sometimes people want to go  someplace where they can have a Lake. They have a boat. They can have fun because right now we’re in quarantine still and there’s nothing we can do. But having a cottage, you’ve kind of basically got a little bit more of a life than you do in the city area so I could see the cottages doing very well right now.

And if you’re looking at buying  a cottage, and if you’ve got the money, go for it. but don’t expect to see cottage prices drop.

 

 

 

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