New app aims to level Toronto's rental playing field, but who does it help - tenants or landlords?
Renters can place sealed bids on listed properties
A new app called Biddwell has been launched in Toronto to help would-be tenants navigate the city's red-hot rental market, but some real estate experts say landlords will be the only ones reaping its benefits.
With the vacancy rate for condos and apartments in Toronto at around one per cent, prospective tenants are being forced to look for ways to stand out from the crowd.
Users of the Biddwell app, which has been available in the Vancouver market since August, try to do that by logging on and creating "renter resumes" that can include a bio, employment history, references and credit scores. They then place sealed bids on properties listed on the site.
The struggle is real, renters say
That's good news to some renters, like Emma Nash, who told CBC News she's had a tough time finding an apartment from a distance. "The real estate market moves really quickly here," Nash said.
A month ago, the 25-year-old was living in Mount Pearl, Newfoundland and looking online for apartments in Toronto. But she says she kept losing out on opportunities. Then she found a listing for a condo in Liberty Village for $1550 and without even seeing it in person, she jumped at the chance to sweeten the deal.
"They're only allowed to ask for first and last. I offered them three months up front and then last," she said. She has been living in the apartment now for a week.
Jessica Abela-Froese, another renter, is familiar with that strategy. "I had one girlfriend offer a whole year of rent and they didn't go for it. "
The 24-year-old says she got lucky when she found her place in Little Italy last April but that's not the case for most of her friends. "It just seems like there's not as much out there as people think there is, and then when you do find something you're competing with people."
Bidding on rental units in Toronto is becoming more common and Biddwell wants to be part of that.
Treat home search like job-search, CEO says
"We kind of preach to our tenants to treat the home search a lot like they would the job search and put their best quality forward," said Biddwell CEO Jordan Lewis.
There has been some concern the free app is going to encourage bidding wars in Toronto.
Taylor Clark and his roommate looked at 15 rental units and rejection was the name of the game. "The ones we wanted we couldn't get. Someone overbid us, which I didn't know was a thing for rent but apparently it is," he said.
He and his roommate even offered $100 more for one of those condos and still, they didn't get it. They are now renting a two-bedroom at CityPlace for $2500.
Lewis told CBC News keeping the bids private helps curb that problem for those hunting for a place to rent.
"They're not bombarded with emails saying, 'You have to come up to this price because someone else did.'"
Tenants can't see other people's bids, but they can see how many offers have been made and whether the price point is sitting at or above asking. Lewis said the goal is to level the playing field when it comes to market values.
'Impossible and exhausting'
"We try to protect them from the bidding war concept, but still inform them and keep them in the loop on demand so they can make an educated offer," he said. "We want tenants to speak to pricing and open up grounds for negotiations."
Lewis says he's seen landlords accept offers well under the asking price to renters with good bargaining power. Some commit to a long-term stay or agree to pay cash up front.
"All landlords know bad tenants are extremely costly," he said.
Rita Corleone has been on the hunt for a downtown apartment for weeks. The 24-year-old security guard calls the whole process "impossible and exhausting."
When asked whether she would consider using Biddwell, her mind went straight to privacy issues. "I wouldn't use it. That would mean your personal information would go to someone you don't even know."
'Bad news for tenants'
Toronto real estate agent Brad Lamb doesn't think Biddwell will help people in Corleone's shoes. He said the app will give landlords the pick of the litter, but won't cut renters any slack.
"Landlords' costs of procuring a tenant are going to plummet. I think it's bad news for tenants," he said. "It's good to have a place to go, a central place, but I think it just means it's more work for a tenant to find a place to live."
Lamb said rental prices in the city have never been higher. He's seeing 400-square-foot condos renting for upwards of $1,700 per month.
He said Toronto is facing a serious shortage of rental properties. To alleviate the bottleneck, he suggests the government ease the current zoning regulations and bring rental properties to the market faster.
With files from Makda Ghebreslassie