Looking to invest in condo, but don't know where

[Manj]

Hi All,

We're looking to invest in a condo unit but don't know where and which development to go with.

We want to buy in down town toronto or Yonge/Sheppard area. We're looking to invest in a pre-construction condo in phase 1 at looking to spend at most $350 (1 bedroom plus den).

Any suggestions would be great.

Thanks,

 

[dt_toronto_geek]

If your really in the dark about something like this pick up a free copy of Condo Guide (they are located in those boxes by subway entrances for free) and flip through it. Also pick up the Toronto Star on Saturday's and flip through the Condo section. Whatever you might find interesting, go to the project's website and look at the floor-plans, location and amenities to see if the building fits your lifestyle and has what your looking for in a condo. When you have narrowed down an area or areas where you might like to live (say, King West Village, St. Lawrence Market, Yonge & Sheppard etc.) go there over a few days off and walk around to get a feeling for the neighbourhood. Take in how much noise there might be, what services are available, how does it "feel" to you, is there a park nearby if you have a dog or children, schools/daycare, etc. Once you've narrowed these factors down take your time and list the pro's and con's of each development in the area you've chosen. Take your time, your in no rush. This is one of the biggest purchases you'll ever make.

 

[Yama]

Down Town or Mississauga, the only two area I would ever buy condo.

 

[Manj]

If your really in the dark about something like this pick up a free copy of Condo Guide (they are located in those boxes by subway entrances for free) and flip through it. Also pick up the Toronto Star on Saturday's and flip through the Condo section. Whatever you might find interesting, go to the project's website and look at the floor-plans, location and amenities to see if the building fits your lifestyle and has what your looking for in a condo. When you have narrowed down an area or areas where you might like to live (say, King West Village, St. Lawrence Market, Yonge & Sheppard etc.) go there over a few days off and walk around to get a feeling for the neighbourhood. Take in how much noise there might be, what services are available, how does it "feel" to you, is there a park nearby if you have a dog or children, schools/daycare, etc. Once you've narrowed these factors down take your time and list the pro's and con's of each development in the area you've chosen. Take your time, your in no rush. This is one of the biggest purchases you'll ever make.

Thanks for the info, I will definetly look in the papers and the Condo Guide.

To be more clear, we do not plan to live in the condo. Our plan is to sell it once it is completed.

 

[MBS-Guru]

you're 3 years too late to be doing what you are thinking of doing. Either buy to live in it or to rent it out.

 

[cdr108]

Thanks for the info, I will definetly look in the papers and the Condo Guide.

To be more clear, we do not plan to live in the condo. Our plan is to sell it once it is completed.

ah, a speculator ... buy at 1BE then

 

[Yama]

If you are thinking of buying for investment. I recommend buying a town house. Condo's are little tricky, your money can be stuck for years before you take over possession, It tend to Fall back 2-4 years from their schedule date. be very careful with condos, at the same time you don't make enough profit compare to house,town house. good luck.

 

[Manj]

From the feedback, it sounds like I should revamp my thinking and start looking into new developments of town houses or houses. Which area's would you suggest?

My budget is roughly 350K

Thanks

 

[urbandreamer]

^Did you know you could buy a 100 acre farm with $350k? It would be a much better investment, just think: free food for the rest of your and your family's life! In about 100 years, that farm will be worth $10 million!

 

[Manj]

^Did you know you could buy a 100 acre farm with $350k? It would be a much better investment, just think: free food for the rest of your and your family's life! In about 100 years, that farm will be worth $10 million!

lol
my plans are short term from 2 - 4 years.
thanks for the info

 

[neuhaus]

If you are thinking of buying for investment. I recommend buying a town house. Condo's are little tricky, your money can be stuck for years before you take over possession, It tend to Fall back 2-4 years from their schedule date. be very careful with condos, at the same time you don't make enough profit compare to house,town house. good luck.

Long or delayed closings should work to your advantage as an investment, as you are only paying the deposit stucture until the unit is finished. The longer the closing the more it will appreciate, especially in a large development where closings could be 4 or 5 years away. By that time the U.S. and world financial market should look much better further improving our own economy, which right now is relatively pretty good.
On the other hand buying into a large development means there will be many others in your same situation which means more competition.

A townhouse for $350,000 in Toronto is rather difficult to find, especially new construction.
For that budget you would have to look at Mississauga, Markham or Richmond Hill. Richmond Hill is nice option as the GO Train gets you to downtown in no time (Miracle on Yonge is being developed right at a major GO station) and the 404 is there. York Region (which includes Richmond Hill and Markham) is also the fastest growing community in Canada which is good for investing.
Houses/townhouses takes much less time to build than a condo which may not be good as an investment as the U.S. economy will not fully recover and be healthy by that time.

I personally think with investment properties you will need to take your time and be willing to sit on it over the long haul.

 

[choochoo]

Hi Manj
For condo investment, I prefer the best areas and within that, the better projects - within one's budget and time horizon constraints.
For this reason I prefer downtown first, the subway line second and North York 3rd (because of the critical mass of projects and amenities in North York which will continue to pace appreciation.
You have to be more critical of sellability if you want to flip the unit as an assignment before closing. You have to also analyze rentability if you intend to close and hold the unit as an investment. As all times, you need to be aware of the sweet spot for any project - what is the profile of the target buyer.
Contact me separately if you want some research info I collected.
dtossan@yahoo.com

 

[daveto]

lol
my plans are short term from 2 - 4 years.
thanks for the info

hmmm...
so you plan on buying some RE, and then selling it in 2-4 years for a profit? After the 10% transaction costs? The days of presale profits are long gone my friend, sorry.

Let's pick a 3 yr timeframe for simplicity.
Let's presume you do this 100% of your mortgage at 3.5%, and that you're able to rent it out to fully cover all carrying costs.

Now, consider the range of possibilities over the next 3 years from a 15% decrease in price to a 15% increase. I think most would say that is a fair range.

On a $360k property, you're facing a range of profit from a ($90k) loss to a $18k profit.
Be very careful.

 

[Ric]

Hi All,

We're looking to invest in a condo unit but don't know where and which development to go with.

We want to buy in down town toronto or Yonge/Sheppard area. We're looking to invest in a pre-construction condo in phase 1 at looking to spend at most $350 (1 bedroom plus den).

Any suggestions would be great.

Thanks,

I would agree with most of the advice so far. Thread very carefully during these times. The boom years are behind us. If you must purchase, do your home work. And by all means, make sure the property you purchase can provide a positive cash flow (Rent > Expenses) if you are forced to rent due to a downturn and you cannot flip.

Good Luck

 

[International Standard]

Hello,

A word of advice. Preamble: Although the US has been demonstrated as having a fault riddled Real Estate market, with collusion at nearly all levels, they do in fact have several aspects to their market (each state being unique) that is superior to ours. Meghan’s Law is one...

Anyhow, one thing I grew to appreciate from American buyers is how they maintain a clear headed perspective when reviewing their investment. They routinely boil down the analysis to a “price per square foot basis”. There is not enough information about your needs/ intention, but NEW construction real estate is the highest price per square foot available to purchase.

By my interpretation, the condo market has been falsely overheated for 2 years now.

Especially in certain concentrations there has been a saturation of small condos, that were marketed to investors...who didn’t care and would never live in them...they would purchase 2 or 3 units at a time...because their Realtor told them it would be a good idea...while the builder slips the buyer agent 4% commission on each sale (1.5% more than the common average on a resale, which is 2.5%)...you can see where the “motivation to provide instruction” is compromised.

After possession the introductory maintenance fees would go up, biting in to the buyers affordability....the investor would need to see gains that would surpass the (then) GST...and Realtor fees etc. Not many investors made money this way. No amount of municipal planning was really happening at this time to curb the development of shoe-boxes, the city was just happy to have the associated revenue. (Being broke and all)

If you’re aim is to be in the Yonge/Sheppard area then I recommend targeting units with 2 bedrooms. They exist, you’re just going to have to pass on the shiny new building idea. And they are relatively better priced compared to the over saturated 1+1 units in that area. Buy older & renovate. In the long run your 2 bedroom unit will sell better because it will have the space that people will demand.
Good luck.