Cautious Investor: Insight into THEHUB by Empire Communities

[islandmix]

Just about to get into the condo market for an investment property. We are cautious investors... We can afford a 450K mortgage if it had to be carried for whatever reasons but we just don't know where to get the best bang for our buck

1. We look downtown at all the great condos going up and then when i use the realtor app, i find so many units available for sale or rent. The wife likes downtown because of location but i don't like it because of rental unit competition

2. I found The HUB project on 1603 Eglinton and Allen Rd (http://thehub.empirecommunities.com) and its in a location that is due for a makeover. This condo project may bring other condos to revitalize the community. I figure that there isn't much condo rental competition and the access to subway is 5mins away plus the new cross town subway will be done in a few years.

My only caution is that construction has not started on project since the 2013 VIP launch... should that be a concern? I think some ppl are just jaded by the location and don't see the potential. East of Allen Road is definietly on the upswing and West of Allen Road on Eglinton just has a bunch of retail shops units that can easily be bought out by a developer(s).

The cost is reasonable as well because it doesn't have ameneties that ppl may never use e.g.) pool

Anyhow... does anyone have insight into this project... or what other regions/projects i should look to make an investment? I have around $90K for deposit and could get more if I have to.

My plan B was to go WEST towards hamilton and Burlington where some condos are going up by a couple GoTrains stops.

I saw another thread a couple years ago on this but nothing since then...

 

[Migos]

What is the attraction to a condo investment for you? Diversification? That will help us answer your questions regarding your investment decision. We need to understand your goals.

 

[islandmix]

Good question... i am self-employed (wife is has fulltime with good pension) and looking for a way to force me to put aside some funds... buying a condo and renting it out seems to be a decent idea... if it increases... great.. if it doesn't.. then its just a guaranteed nest egg for me...

So its a matter of me filtering through the glut of options... but would like an option that will be attractive to prospective renters since this will not be my primary residence.

 

[Migos]

Good question... i am self-employed (wife is has fulltime with good pension) and looking for a way to force me to put aside some funds... buying a condo and renting it out seems to be a decent idea... if it increases... great.. if it doesn't.. then its just a guaranteed nest egg for me...

So its a matter of me filtering through the glut of options... but would like an option that will be attractive to prospective renters since this will not be my primary residence.

I think the first question you have to ask yourself is do you want all of your "nest egg" in one investment? No investment is guaranteed, especially not something like a single piece of real estate. What if your tenants don't pay rent? What if you can't find tenants? What if the real estate decreases in price? What if interest rates rise?

Have you ever been a landlord? It isn't the same as owning passive investments like equities, bonds, etc. It's a job. If you're self-employed, you may not have time to be a landlord.

I don't think investing in a preconstruction condo could be described as a "guaranteed nest egg". If you want guarantees, look at high-interest savings accounts or maybe high-quality fixed-income.

How come you're looking at preconstruction anyway? Why not buy something that you don't need to guess what it will rent for or wait years for it to be compelte (if it ever gets built)?

 

[islandmix]

All valid points Migos... this won't be only investment strategy though...

Real estate is just another option that i haven't considered yet... so my eggs are not in one basket.. If we can get past the assumed risks are there condo projects that have intrigued yourself? It seems that you are wise investor... what real estate projects are you looking at?

i am even open to townhome projects

 

[Migos]

All valid points Migos... this won't be only investment strategy though...

Real estate is just another option that i haven't considered yet... so my eggs are not in one basket.. If we can get past the assumed risks are there condo projects that have intrigued yourself? It seems that you are wise investor... what real estate projects are you looking at?

i am even open to townhome projects

Why the attraction to precon? It's very speculative in nature, especially if you aren't experienced in the real estate game and know the many pitfalls.

I would think your best bet would be to find an existing rental property so that you aren't guessing on the financial return (i.e. you'll know how much it costs, how much it rents for, etc.).

 

[OolloO]

I have seen the precon condo signs, but I do not know the details of the construction. I have spend some time researching the area mainly for houses and will speak to that. The area has been changing slowly, and prices have been appreciating very nicely. I do see the underground LRT attracting better amenities, stores, restaurants, etc... Just north and south of Eglinton and just West of Allen Rd are several pockets of very affluent homes that are well into the million dollar mark. These affluent house "pockets" are unknown to those unfamiliar with the area. I remember seeing an article mentioning that in general new transit project intersections (Eglinton LRT and Eglinton West Subway) increase property value anywhere from 30-40%. I can't seem to find this article now....

Funny, anecdote from a friend that has lived in the area for over 20 years said "I remember when the ladies of the night use to walk the streets in the Dufferin and Eglinton area, back in the day". He said he no longer sees them and his quote was a little more crass.

The area is W03 according to MLS maps. From the link below on page 26, you can see the decent year or year appreciation. Better than all of Toronto on average.
http://www.torontorealestateboard.com/market_news/market_watch/2015/mw1505.pdf
http://www.torontorealestateboard.com/market_news/market_watch/index.htm

Definitely, see this area as more of a buy and hold investment. It will take time for the area to meet its potential. Another way to look at the area, is to ask "who has the money to purchase the homes in the area in the 550k-700k range?". The original owners are cashing out and people with the higher incomes are moving in. If you drive by the neighbourhoods, there are several infills going on and tons of renovations.

"Once the first starbucks is built in the area, it might be too late to invest."
~Me

Just my two cents.

 

[drewp]

The Hub will be in a transitional neighbourhood that should be improving over the next few years, especially with the arrival of Crosstown. It all depends on what the pricing is. I remember not liking the floor plans that much, although, I am sure there are some good options. For this area I would not want to spend more than 550/sqft.
If being near the crosstown is something you are thinking about for a good investment....why not look at Mount Pleasant and Eglinton area. There are some older condos, and not so hyped up condos that are quite affordable, plus it is already in an established neighbourhood with good transit already.

 

[WislaHD]

Buying along Eglinton is the best suggestion I have.

There is no way real estate values here don't rise when the Crosstown (and the Eglinton Connects project, which will greatly increase livability) is completed. And at worst, you can still retire to a beautiful, central and urban part of Toronto.

 

[islandmix]

quick update... i went ahead and purchased pre-con at phase 2 of the Redpath condos over at yonge and eglinton area.

I still like theHub but its still years away from getting a facelift done in the area.

 

[Viking Boy]

Just OT: Is the Redpath condos still a good investment? Or what about Minto West Side