In Toronto, condominium prices are out of control. They’ve climbed more than 40% in the past two years, from o $350,000 to a cool half million dollars. If you’ve been able to purchase, good for you. If you haven’t, unfortunately for you leasing is now a lot more expensive.
Two years ago, you would be able to find a 1 bedroom lease for $1,500, and on the higher end of things may be around $1700. Now in 2018, for the same space, you’re looking at around $2100 to $2200. With the average salary of Torontonians being $60,000 per year, the average lease will be costing you up to 45% of your total yearly earnings – and that’s before you have to pay taxes.
Now, this poses a problem, because according to the Ontario Human Rights Commission, a tenant shouldn’t be spending more than 25-35% of their income. Those who fall short are rejected. With rents increasing significantly, the question becomes how does one find housing that’s close to work to live in if you cannot afford to buy?
Having grown up in a family of residential real estate investors, I’ve seen a lot of leases and met with a lot of tenants. A lot of people pay their leases on their own – most people do that and it’s considered standard. But what if there’s another way? What if there was a better way to stretch your dollar?
Whether you’re a young professional or a seasoned one in your field, what kind of value do you bring to your company? Does your boss or manager like you? If you bring value, or you have the favor of your superiors – you may be able to use it to your advantage.
Negotiate to get your company to pay for the lease.
Now if you’re thinking, “What? That’s crazy, my company or employer will never pay for my lease! Having a place to live is part of my own expenses and it’ll never happen!” But when you dig deeper, that’s essentially what the bank does when someone buys a property. They loan the buyer the necessary funds to purchase a house or condominium, and the bank earns money off the interest that they charge. It might be different, but technically speaking the bank pretty much pays for the property.
Then you may be thinking, I’m the only one to benefit, so there isn’t any incentive whatsoever to my company or employer to pay for my lease. But there is – it gives your company/employer tax benefits. Since they hired you to work for them, your time is an expense to the company that they get to write off for tax purposes. If you’re still not convinced, the idea is no different than company-paid business trips or having insurance coverage that companies provide their employees.
This, in turn, creates a win for you, a win for your company or employer, and a win for the landlord since everyone benefits from it.
There are also tax implications to keep in mind. Consult with an accountant to see whether this option makes sense for you.