There’s nothing more appealing to tenants than to have the opportunity to move into a brand new building. They are the best and most desirable rentals on the market in Ontario today. Just like a new car (if you can afford one), everyone wants a pristine apartment. So leasing a brand new building should be a breeze. Unfortunately, there are lots of mistakes made when starting a new lease‐up and they can have long‐term effects.
The number one problem with new lease‐ups is under‐valuing the product. Many companies play a guessing game where they do a little market research and then introduce blanket pricing. All one bedrooms of this type are this price and that type this amount. The reality is there is value to the location of the suite, the view, the proximity to amenities, parking, etc. Other factors such as corner units which eliminate some of your neighbours have premium value. Suites should be priced on a suite by suite basis and those prices should automatically adjust every time three units are rented. If one suite type tends to rent quicker than others that price should be modified immediately as it means it wasn’t priced in relative comparison to the other apartment types. It’s perceived to be a bargain. A few years ago I witnessed a landlord rent almost an entire riser before they caught the error. Many of those tenants stayed long‐term
(over five years) which made the loss of potential revenue for the landlord extensive.
The second aspect that landlords should consider for new development leasing is blocking the lease‐up. Open a building in phases. Those who lease an entire building at once often end up in a situation where suites aren’t ready on time, people end up living on a floor that feels like a ghost town for months and there’s no sense of community. It’s also harder for construction to maintain their teams and ensure suites are rent ready before move‐in.
And finally, timing is everything. We strongly recommend against opening a new rental office in December or the first of January of any year. It’s hard to create the hype needed to get momentum going in a new build. It’s always a tough start when you open during these time periods. We recommend opening an office at least ninety days ahead of the first occupancy for buildings over two hundred suites with the best openings always being in the early Spring or Fall. The objective is to lease the entire phase one of the project for the first date occupancy is available. Keep in mind though, that being approved for occupancy is often a problem. More often than not, we’ve had to adjust move‐in dates because the inspector hasn’t approved the building. For initial move‐in days, bring in extra staff to handle the elevators. You need to have as many available as possible and we always recommend two hour timeslots for best results. It doesn’t matter if you book over morning or evening rush hour on those days since building residents are still at a minimum. On occasion, we’ve started move‐ins as early as six am.
If you want to get off to a great start with your new tenants make sure you have some kind of welcome gift for them on move‐in. With that many building occupancies In a day there’s always going to be mistakes made. That welcome gift often smoothes a potential conflict.
Market conditions show that this is a very good time to be building but leasing smart is the only way to protect your investment. Hiring a dedicated, professional leasing team is often the route to best results. They understand the market and they are motivated to lease because they’re working on commission.