In Conversation With… Shanker Narayanan, General Manager, Del Condominium Rentals
Condominiums are booming in the GTA, with an increasing number of owners choosing to rent out their units for investment purposes.
Del Condominium Rentals, setting a standard in suite rental management in the GTA since 1986, offers such owners suite leasing services without having to worry about the day-to-day concerns related to being a landlord. From marketing, tenant screening, leasing, maintenance and repair, accounting, insurance coverage, compliance enforcement and revenue retrieval, the company does it all.
We spoke to Shanker Narayanan, general manager of Del Condominium Rentals to learn a little more about this growing business.
Condo Life: What is the scope of the management services you offer to condo unit owners? Is it a one-size fits all package, or is there a range of services owners can choose from…?
Shanker Narayanan: We provide day-to-day management of the suites, including complete research and marketing for new owners, arranging insurance, utility transfers and other services – all for a fee of six per cent of the monthly rental. We plan to also introduce a tiered system involving additional services, such as rent guarantee, suite inspections and maintenance.
CL: How much of a growing business category is this for Tridel? We’re hearing so much about the investor element in condominium ownership these days…
SN: We have 2,550 condos in our portfolio today and are planning to grow to 3,500 by 2024. We were primarily a company that provides leasing services for Tridel suite owners, and about 78 per cent of our business comes from their new builds. We have evolved over the past five years into a leading condo rental management company in the GTA. We are aggressively trying to grow the non-Tridel portfolio. If this happens, we would look at increasing the overall portfolio to hopefully 5,000 suites in five years.
For Tridel new builds, we provide lease-up services from interim occupancy to eventual unit registration. This period might vary from building to building. We are currently leasing about 35 to 40 per cent of the inventory in all new builds.
CL: What is your typical client profile? Investor-owners who want to be completely hands off? First-time investors who really need the help being a landlord…?
SN: About 90 per cent of our owners are first-time homeowners or single unit owners, who don’t have the time to self-manage their units. We do have a lot of seasoned investors who have multiple suites in their portfolio. On average, a homeowner stays in our program for five years. They usually have an investment cycle that culminates in either them selling, -self-occupying or in rare cases self-managing the unit.
CL: What are the main benefits of using your services, that perhaps suite owners couldn’t do on their own?
SN: Most owners don’t know that there are a million things that could go wrong when managing a condo unit. We know this from experience and from managing a portfolio of more than 2,500 condos over the past decade. Most owners who self-manage condos have a belief that “this won’t happen to me.” Things get complicated at times, and that’s when expert knowledge comes handy. For example, an owner might have a new condo but there might be a water leak from a unit above and that causes water damage in suites below. There could be resulting claims from owners against this owner even though the problem isn’t with their unit. We manage these complex scenarios with the insurance adjusters and the condo property management.
We are a one-stop shop for homeowners, providing turnkey management and peace of mind.
CL: How do you arrive at the end cost to clients for these services? Does it depend on the unit size, rental rate, specific services they’re using…?
SN: Our management fees are very competitive. We have always been a market leader and have been looked upon as setting the benchmark. We also have preferred rates with vendors for services such as plumbing, electrical, HVAC and handyman work. In addition, we co-ordinate works for window coverings, flooring and window and door installation. We have synergies with Tridel and ensure that we pass on the benefits to suite owners.
CL: And how do you determine the rental rate for units?
SN: We do a thorough market evaluation. We are the rental experts, and as such, Tridel sets the rental benchmark for any community. Our expert team looks at trends on MLS and third-party Internet sites and comes up with the best practices to research and tabulate rentals.
CL: Ideally, suite owners would want to be cash-flow positive when renting out their investment condo. How do you help them achieve this goal?
SN: Most suite owners have a set financial cycle that will allow them to realize market potential. We save them costs and the hassles of day-to-day management and they see the benefits over a period of time. While cash flow is key for many owners, they see the merit of us ensuring that the unit is well maintained and the equity grows over time.
CL: And when it comes time that they wanted to sell, how can you assist in that transaction, say, to another potential investor-owner?
SN: We typically refer owners back to their agent when they consider selling. This is our partnership with our realtor colleagues. We do, however, ensure the transaction and unit transition go smoothly. For example, we make sure all necessary restorations are completed and that things are co-ordinated with residents and property management.
CL: Any other key pieces of information potential clients should know about your services?
SN: We are leaders in the rental business. What sets us apart from others is that we are part of Tridel. We bring synergies from other group companies such as Del Property Management, DelSuites, Tridel Customer Care and Deltera (construction). This is invaluable and often beneficial for homeowners.
For more information, contact Del Condominium Rentals at the website, 4800 Dufferin St., Toronto, or call 416.296.RENT (7368).