Developers rental guarantee program
RENTAL GUARANTEE PROGRAM
Developers acknowledge that most condominium purchasers in today’s Toronto real estate market are investors who either look to profit from market price appreciation or generate passive future rental income.
Rental Guarantee programs become a default offering by many developers to attract investors buying into their project.
Condominium developers offer rental guarantee programs for the main reason that they can sale the suites in the project faster and sometimes for higher prices. However, through our long term relationships with Toronto’s leading developers we demonstrated that happy buyers are also repeat buyers and happy buyers are measured at the end of the transaction and not when the project is sold.
Rental guarantee programs usually last for 2 to 3 years and generally offer a fixed rent based on either a price per square foot or a percentage of the purchase price. In a price per square foot scenario, if the property is 600 sf and the rent guarantee is $3.5 per sf then the monthly rent would be $2100 per month.
In a percentage of purchase price option, if the purchase is $400,000 and the percentage of the gross rent is 5% then the annual gross rent is $20,000, therefore the monthly rent will be $1,667.
What could set a rental guarantee program from headache to success?
An experienced condominium rentals manager must understand investors needs and wants. However, a condominium rentals manager must also understand the pain points that the developer is facing at the end of the project and offer add value through its experience and knowledge. Over the last 2 decades DASH successfully assisted hundreds of condominium investors with their purchase and ensure high customer satisfaction. Statistically purchasers that found their purchase experience smooth and profitable followed the developer to the next project.
DASH continues to offer a smooth and worry free rental management solution to some of Toronto’s leading developers when it comes to strategic preparation for occupancy and executing rental guarantee programs.
Our experience, knowledge and technological tools allow us to better serve developers and property owners. The result is a positive purchase experience that maximizes developers’ brand awareness and investors’ profitability. We have acted for hundreds of purchasers from the initial investment phase assisting them with analyzing the ins and outs of the the purchase process.
DASH has been there for condominium owners since 2002 helping them with renting their closing arrangements, financing, insurance, leasing, maintenance, monthly reporting, non resident taxes and HST rebate filing, making condominium rental ownership easy.
Call us today at 416-222-6175 and find out how we can help you.
Developers want REPEAT BUYERS, but at what COST?
Occupancy phase is welcomed by prior completion of the PDI, which many buyers have not experienced in the past or do not understand the importance it holds.
On the other side, Developers’ strive to keep owners happy at occupancy. This often becomes confusing when owners end up renting their property.
Owners who rent their units are usually unaware of the legal situation, TARION or interior warranties and end up complaining to building management, and the developer for damages created often due to tenant’s misuse.
Alternatively, not allowing owners to lease their suites at occupancy creates a whole new set of issues which poorly reflects back at the developer.
Part of the challenge is that many owners are not aware of Tarion guidelines and often ask a friend to be present at the PDI. Then, the owner turns to the developer to fix all repairs even though the developer is not required to. However in the attempt to keep buyers happy, the developer often consents to such requests, which delay other repairs as a result of it and add costs.
The developer, being responsible to first year’s building operating budget deficit, wants to have the newly elected corporation board sign off the technical performance audit in order for the developer to finish the last required repairs and have TARION release any deposits held for the project.
Repeatedly, new boards have a feeling that the developers “cut corners” on construction, usually leading to lack of cooperation and forthcoming communication at early stages.
Boards typically will ask developers to complete works that in some cases are not warranted and represented by the developer in advance just to receive the sign off.
At DASH, we understand and share the challenges the developer is facing as outlined above.
We offer an integrated approach that benefits the purchasers and the developers leading to meeting both parties goals, high buyers’ satisfaction and a smoother transition for developers.
How do we address these challenges?
DASH will actively engage in educating buyers and tenants about the process of PDI, occupancy and registration and will act as a “goalkeeper” between tenants-buyers-developers to ensure only legit requests are submitted and addressed. DASH will be the single address of contact for the developer with regards to the tenants and the purchasers information (For these purchasers who enrolled to our program). In turn, this allows the appointed building manager to maintain an up to date database and be aware in advance of building occupancy status. DASH will make sure all proxies and forms are duly executed to allow building management maximum ability to achieve quorum at turn over meetings.
Ultimately, DASH’s services will improve buyers’ experience and positively reflect on the developer. The reduced time and money spent by developers and building management will allow them to focus on occupancy, completion of building, registration and setup of the new building.
Contact our team today and learn more how we can complement your success