Lots of people ask us as part of their search for a apartment, which ones are better investments. Personally, if I okaynew the reply to that a hundred%, I’d be writing this from my own private island. Alas, that’s not the case and I write in my house office, looking out on the snow.

There isn’t a hard and quick rule in terms of funding condos. Lots of it depends on what exactly you wish to get out of it. Some people think of investment condos as leases, while others are thinking of sales value down the road.

If you are trying to purchase a condo to lease out, then there are a number of factors you have to consider.

First, do not just buy the smallest and/or least expensive unit you’ll be able to find. Not too many people are going to want to live in it – would you? Instead, think of who your target market is going to be. In order for you singles, then one bedroom condos can be fine. Once you get to couples (with the potential for children), then you are going to want to think more by way of larger units with two bedrooms.

Speaking of which, there was a recent hue and cry over the shortage of condos which are suitable for families. Sure, there are a number of tired old buildings with three bedroom units, however they’re few and much between. The place are the new models? What are the options for the families that don’t need a house? Or these than can’t afford a house? Earlier than I get to really ranting, I just needed to point out that condos have to be equal opportunity. They are not just for singles or couples or empty-nesters. Some individuals need to increase a household in the sky. Time to do something about it. Anyway, on with the article…

Location can also be going to have a bearing on your goal market, or on the available pool of renters who will make up your market. In order for you primarily university students, then look to buy near U of T, York, Ryerson, etc. Remember the smaller schools and faculties, reminiscent of George Brown or Sheridan. There are loads of students in Toronto, so there are numerous options for you to appeal to them.

The flip side in fact, is that if you do not need student renters, do not buy close to where they would want to live!

If you’d like docs and nurses and interns and the like, then you will wish to buy along Hospital Row, or not too far from it. Yes, there are more remoted facilties around the city, however stay close to where the biggest renter pool is likely to be.

Many individuals usually ask about new condos versus resale as rental properties. This is a hard one, but my intestine really feel is that new buildings should not the best bet. Perhaps if you’re going for a 1,200 sq. foot penthouse with a view to die for, but a easy one bedroom just places you in the pack with everyone else. If a 300-unit building has 30 folks purchase to rent out, you’ll be facing some stiff competition to get a renter into your unit. You could be best to simply avoid that form of competitors and look for resales or smaller new developments.

Speaking of competition, this is likely to be a good time to delve right into a dialogue of rents and their recent decline. With all the apartment action in Toronto the previous few years, many models have been constructed and lots of have been bought to hire out. As with every market, supply and demand dictate pricing. When there are more units than renters, there’s more and more competition to get those lease dollars. Thus, rents go down.

Even with a decline in rental amounts, if you’re buying as an funding, you might want to take a look at the bigger picture. Don’t count on to pay your mortage and apartment charges – and make a profit. Those days are gone. However add up all of the monthly expenses and for those who get a rental amount that isn’t a lot less than you might be spending, then you need to think about it more in terms of your mortgage only costing you $100 a month. Even if it is $300 a month, that’s significantly less than in the event you had been paying everything yourself. You aren’t getting much for nothing nowadays, so be completely happy that somebody is helping subsidize your mortage.

Now, there may be one other group of people who are thinking more about sales in the future. Some could also be buying a condominium off plans with the considered flipping it once the building is done. I do not want to repeat myself, but basically re-read what I said above about buying in a new development to rent. Being one of the herd isn’t always a very good thing.

It was once that buying new and selling it after residing in it for a few years was assured profits. Not a lot anymore. Land costs and building prices are up, plus builders know they’ll get more for his or her product. Thus you must think more strategically these days.

There are three things I typically advise when folks ask me what to buy that can improve over the years.

First is to purchase large. Buy as big a apartment as you can afford. This is for 2 primary reasons. The primary is as above, in order to not be one of a hundred one bedroom models for sale in a building. The second is that a large section of future condo patrons are going to be empty-nesters and downsizers. Many older couples will likely be leaving their bigger properties and they aren’t going to wish to live in a 650-sq.-foot one-bedroom condo.

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