I am in the market for a condo here in toronto and was hoping to get a few pointers as to what will be good value. Basically I was planning to just rent an apartment, but after doing some numbers, it quickly seemed apparent that after even 4 or 5 years I would have wasted a huge amount of money on rent that could instead be used to pay a morgage.
I probably won’t be living in the place for more than 5 years, at which point I’d either sell if the market was really hot, or otherwise rent it. I’m trying to figure out what type of condo would be best? Is it either to rent/sell a low end condo or something more upscale? Is a condo that comes with parking (downtown tdot) a big incentive? Any other info or advice would be most appreciated.
They picked one relatively near the local university, one that has clean grounds, good amenities, & is well care-for. The University location guarentees they will be able to find a tenant at a good rate.
We happen to live in an area where condos are hot and sell well. There are several realtors who specialize in condos only and we’ve been approached by some asking about our willingness to sell. So yes, it does vary.
I don’t what sort of choices you can get in the city. Are you thinking high-rise? I don’t know much about that. In our case, we have a townhouse which is generally more desirable than a layout where you have neighbors above or below you. End units are good (one less common wall). Crossventilation is also a good thing. All the condos in a development may be the same in terms of floorplan, but location can definitely make a difference. A premium view, good parking, low traffic–all are aspects you’ll like for yourself and will enhance its future marketability.
There’s the old saying that the 3 most important criteria for real estate are
Location
Location
Location
If your place is in a desirable location then the market for real estate is always going to be hot there… so you’ll be able to sell it for more in the future (or not lose as much as another location, should the market be soft) or easily rent it. Would you want a condo in the middle of nowhere with no access or major roads or public transportation? Neither will potential buyers in the future. I just bought a place at the corner of Yonge/Finch… Probably the biggest factor in my selection was the location… Fairly quick access to the 401, Don Valley & 407. Throw in the TTC station next door and I’m confident that it will be desirably to potential buyers when I sell it (or perhaps rent it out)…
If you’re planning to stay in the same place for several years, even if prices goes down, I would still put my money into a mortgage rather than rent…
You hear that the condo management needs to be good. See how well the common areas are maintained, whether the members/owners are quarrelling with the Board, especially whether there are any lawsuits. Common areas include invisible stuff like plumbing, not just landscaping. To avoid: a complex with a high percent of the condos rented out (not owner-occupied).
Sorry for all the negatives. A good knowledgeable realtor could help steer you away from problem complexes.
Oh yes, in comparing buying to renting, y’gotta weigh Rent against a formula; ie, for a thousand in payments early in a 30-year mortgage, you’ve only bought say $100 of equity and the $900 is interest, however the $900 is deductible so it only costs you [$900 minus (your tax bracket times $900)]; then add 1/12 of the real estate tax & 1/12 of your yearly insurance per month, and the complex’s monthly fee.
However meanwhile the value is appreciating, you hope. Since most of the money involved is borrowed money, your down payment can double in value when the property has appreciated 20%. (That assumes your down payment was 20% of the property’s value.)
On the other hand, there may be a bubble in real estate right now. In that case your whole down payment can just get wiped out if you have to sell after it’s gone down 20%.
Then count in the commission and other costs of sale in your costs. Man, this post is full of negatives. But win or lose, you gain the experience of buying real estate, with the benefit of making you smarter the next time.
Oh, received wisdom in this area is that you buy the nicest you can, since they appreciate better than the lower-quality ones. However this wisdom is received from real estate brokers, who may have an iron in the fire. Let’s hope another Doper can contribute on this subject.
Location, location, location is important, but maybe not as important as this: ground floor/no stairs access.
From our experience selling our condo on our own, we had literally dozens of people in their 50’s-60’s who came to look but damn near immediately said “no thanks” because our condo, while a ground floor unit in a 3-floor apartment style building, made you go up a few steps to enter the building then down a half-flight of stairs to get to our front door in the buildign. People nearing retirement, who may already have sore joints, will not buy a place where they will have to use the stairs.
Of the total number of people who came to look at our place, probably 2/3 to 3/4 were in their 50’s-60’s or older and we were generally without hope. We finally sold it to a woman in her 40’s who liked that it was so clean (it was only 2 years old) and that everything was so neutral (off-white walls, light beige carpeting, no wallpaper that she had to remove or anything to paint over).