Should I rent this downtown Toronto condo?

[rsgnl]

Hi everyone. I am 21 going on 22 and currently live in the GTA suburbs with my parents for free. I work online and earn an above-median USD salary. It is a great situation, but I am really set on experiencing downtown Toronto lifestyle and have been looking at condos to rent since September.

I have finally come across a unit that I really like on Wellington St. at Blue Jays Way. It is a 566 sq. ft. 1 bedroom unit for $2,070 per month on a 1-year lease that is move in ready (fully furnished + kitchenware + small things like table mats) and includes an underground parking spot, utilities, internet, and cable.

I really like the location and the unit itself is freshly renovated and very nice. I am wondering if anyone has any opinions about this overall situation described and anything I should know before signing any paperwork. Is Wellington St. W and Blue Jays Way as good of a spot as I think it is? Any rookie mistakes to avoid?

I do know that this money could be put towards a mortgage, but job security, the USD to CAD exchange rate, special assessments, rising maintenance fees, property taxes, the seemingly-always-looming risk of a market correction, and other factors are risks that I do not want to take at this age.

I will still be able to save enough money, on top of my current savings, for a healthy down payment on a traditional house in the suburbs when I am in my late 20s or so, and the combined income of a significant other would help further -- depending where life takes me.

Thanks in advance!

 

[Auraz]

Wow! You really wanna be where all the action is! The building is quite well managed and is a great option for furnished rental but the area is under going a construction boom and is a real pain to get in and out of with your car. Trust me, not everyone is born for the suburban life and most people think they want it but don't really deep inside. Why the need for such excess living in the suburbs when you can have it all downtown. You are young definitely experience downtown lifestlye the energy in this city is unreal and oh man summer time is coming around the corner. For sure rent for one year though and explore the city and find out where your really wanna lay your roots. Some of these new buildings coming to the city soon are really top notch!

 

[rsgnl]

Wow! You really wanna be where all the action is! The building is quite well managed and is a great option for furnished rental but the area is under going a construction boom and is a real pain to get in and out of with your car. Trust me, not everyone is born for the suburban life and most people think they want it but don't really deep inside. Why the need for such excess living in the suburbs when you can have it all downtown. You are young definitely experience downtown lifestlye the energy in this city is unreal and oh man summer time is coming around the corner. For sure rent for one year though and explore the city and find out where your really wanna lay your roots. Some of these new buildings coming to the city soon are really top notch!

I agree that living in the suburbs is not for everyone. I feel like my personality and lifestyle will be much more aligned with downtown Toronto, and a 566 sq. ft. condo feels like more than enough room for me. A lot of people I know, even with children, seem to live in these excessive homes with rooms that they barely use. It seems inefficient.

 

[DSC]

Don't agonise over it! You are looking at a one-year rental and if you like the building and the neighbourhood you should just go for it. A year is not a long time and if you decide it is not to your taste then you can move when your lease ends. During the year you should certainly look at other neighbourhoods and other types of building and then when lease-renewal time comes round you can better evaluate your next lease (or purchase).

 

[James]

Please dispel the myth that you must buy a property. I think many would agree that renting sounds like the best option for you. The location you are looking at right now will be pretty active. It will also allow you to explore lots of other areas of downtown, so as DSC smartly suggested above, take the opportunity while you're downtown to check out other neighborhoods. Walk around, commute to those areas, figure out the demographics and feel of other areas. You have a whole year to decide if you want to stay or try another neighborhood.

 

[TorontoMike$$]

Buy! Pay 2k/month towards a mortgage (even if payments are less) fast track your savings for a home. Or Revisit in a few years and if you have enough dp for a house you can always keep the condo as a rental!

 

[rbt]

Buy! Pay 2k/month towards a mortgage (even if payments are less) fast track your savings for a home. Or Revisit in a few years and if you have enough dp for a house you can always keep the condo as a rental!

You mean closer to $1200/month for mortgage right?

He's looking at a furnished condo. So, monthly fees ($600/month for taxes, maintenance fees, insurance, ...) and furniture that first year will be $5k (small stuff like dishes, towels, pots/pans, etc. really add up even when buying from Ikea).

Your advice risks him being house-poor when he finds out what the real cost of ownership is. $2k/month mortgage != $2k/month furnished rental


Also, he's never lived in a condo downtown before. What if he hates it after the initial honeymoon period wears off? Renting for a year or 2 is smart, just to make sure the life-style is a fit. High-rise living can make many hobbies impossible to pursue.

 

[someMidTowner]

Also, he's never lived in a condo downtown before. What if he hates it after the initial honeymoon period wears off? Renting for a year or 2 is smart, just to make sure the life-style is a fit. High-rise living can make many hobbies impossible to pursue.

This.

Best case for renting in this instance. Nobody should make a long-term investment into a lifestyle they're unfamiliar with. The Rent vs Own debate doesn't really apply here, and even if it did, it's just a year.

 

[TheKingEast]

Rent. You may not like the downtown condo life. It's not for everyone.

 

[TorontoMike$$]

Hey Rbt. Yes thats what I mean.. $2k total payment.. ~$1400 mortgage payment.. i would say roughly 12k towards principal 1k perr month .. so about 36k in 3 years of equity.. plus appreciation which easily offsets the lansld xfr tax etc. Not bad and the option to rent it or sell it later.

You mean closer to $1200/month for mortgage right?

He's looking at a furnished condo. So, monthly fees ($600/month for taxes, maintenance fees, insurance, ...) and furniture that first year will be $5k (small stuff like dishes, towels, pots/pans, etc. really add up even when buying from Ikea).

Your advice risks him being house-poor when he finds out what the real cost of ownership is. $2k/month mortgage != $2k/month furnished rental


Also, he's never lived in a condo downtown before. What if he hates it after the initial honeymoon period wears off? Renting for a year or 2 is smart, just to make sure the life-style is a fit. High-rise living can make many hobbies impossible to pursue.

 

[TheKingEast]

Hey Rbt. Yes thats what I mean.. $2k total payment.. ~$1400 mortgage payment.. i would say roughly 12k towards principal 1k perr month .. so about 36k in 3 years of equity.. plus appreciation which easily offsets the lansld xfr tax etc. Not bad and the option to rent it or sell it later.

This is assuming value will increase.

 

[rsgnl]

This is assuming value will increase.

I think long-term appreciation is inevitable in a city like Toronto where the population continues to grow against limited land. I do believe mortgages are a much better financial decision after about ~7 years. That is certainly only an amateur opinion.

Nevertheless, I used a few Rent vs. Buy calculators and determined that it would cost the same either way over 2 to 3 years based on 2% annual appreciation of the condo.

There are a lot of costs involved with purchasing a condo that are hard to justify over the short term. Mortgage + closing and selling costs, legal fees, property taxes, maintenance fees, land transfer tax and costlier insurance than Tenant coverage.

I went ahead and signed the 1-yr lease agreement. I think $2,070 for a nice, 2014-renovated unit in a 2003 building with full furnishings/TV, an underground parking spot, all utilities, internet, cable, and an exciting downtown location that seems to be near just about everything (even including 2 gas stations on Spadina just 1-2 minutes away) is a pretty good deal. Should be a fun year!

Thanks everyone and I hope to become involved with this website community more as I become a Torontonian for the first time!

 

[DSC]

Glad you took the (small) plunge and signed a 1-year lease but I really urge you to use the year to really explore options - these should certainly include extending your current lease but you should also look at rentals in other neighbourhoods, buying and ...... Enjoy!

 

[rsgnl]

Glad you took the (small) plunge and signed a 1-year lease but I really urge you to use the year to really explore options - these should certainly include extending your current lease but you should also look at rentals in other neighbourhoods, buying and ...... Enjoy!

Thanks! I will certainly take your advice. I am excited to explore other neighborhoods and will always keep an eye on listings.

I think I will continue to rent until I am around 28-30 or so before considering buying. I want to have at least a 40% down payment with the combined income of whoever I meet

 

[Dal Kury]

Good call, great location. Enjoy your surroundings, it's a great city!