With an abundance of condos being built in the city of Toronto, investing in condos has become an integral part of the real estate market. Whether you purchase in a seller’s market or a buyer’s market, pre construction or resale, there are a few key things to consider when purchasing a Toronto condo for investment purposes.
1. Condos that have easy access to transportation tend to hold their value better than properties without access to a major highway or public transit. A few examples of condos with subway access are The Arc and Aura. The Arc is located at Bayview and Sheppard and has close access to Bayview station. Aura, the new 75 storey tower going up at Yonge and Gerrard will have direct underground access to both the subway and the PATH system. These condos are great examples of having good access to transportation
2. The old adage of buying the most undesirable house on a desirable street can also apply to buying a Toronto condo – in a slightly different way. When looking for a Toronto resale condo to invest in, don’t choose the best suite in the building or even a suite that has been staged. These units tend to command a premium in pricing for showing well. Buying a unit that needs a bit of cosmetic work will bring you a better return down the road, than a unit that has been professionally painted and staged to sell.
3. If you are leaning more towards purchasing a pre construction for an investment, it is important to buy through a quality builder. For example, Tridel, Great Gulf and Canderel Stoneridge all have excellent reputations for building quality product. Even if you pay a little more per square foot for their product, the return will be much greater down the road. Buildings that have been built with better finishes and features will most definitely command higher resale values and rent values upon completion.
4. Many investors tend to purchase investment units whether it is a pre construction unit or an existing condo with the intention of renting it out. This concept is a great way to cover your monthly costs of carrying your Toronto condo. A few things to keep in mind when investing in a unit for rental income are as follows:
a) Purchase in a location where renting is necessary for the demographic. Being close to universities and hospitals is always a good location choice.
b) If the unit is pre construction, make sure you have calculated not only your monthly mortgage payment, but your expected maintenance fees and/or parking and locker fees in order to ensure that you will have a positive cash flow.
c) When the time comes to rent out your unit, make sure you have a good quality tenant to ensure that your condo is in good hands so it will be well maintained.
In short, it is important to consider the above mentioned factors when looking for an investment condo in Toronto. With so many condo options to choose from, take the time to carefully select your investment property to ensure that it will allow you to rent it out easier as well as to give you a good return down the road.