Disagree. Luxury goods are prone to more wild price swings and much larger possibility of depreciation. In addition, the length of time to sell will likely be much greater. Definitely should not be treated like any other first mortgage situation. Plus if you have to leverage yourself to do so, you have no business buying into a condo situation that is as much about the service as it is about the living space. Not to say that you shouldn’t get a mortgage if you otherwise have $X million in savings, if it makes sense to do so, just that you should not need to.
google “Toronto condominium sue” and see how many articles there are about lawsuits over condo purchases,bad investments and bankruptcies. With warnings of an upcoming major collapse in the the Toronto real estate market.
It’s a luxury apartment, but it is not considered a luxury good. That term is reserved for high-end cars, boats, and other assets that often depreciate when new. $1mm isn’t that uncommon for a real estate purchase, and exists within a very large, easily understandable market. That price point is often more stable than others.
If you want to argue that the service is too expensive, that’s one thing. But the post I was responding to only referenced the price tag.
In New York, the maintenance fee typically includes any costs associated with maintenance and upkeep of the building, plus gym, pool or whatever other ammenities the building provides.
[QUOTE=PandaBear77 ]
I think you’ve got more money than you know what to do with.
[/quote]
That’s not necessarily true. The OP might just make a lot of money and in places like NYC, San Fran and I guess Toronto, a million dollars in real estate doesn’t necessarily go that far.
It’s a classic “lottery winner” effect that people tend to think an amount of cash above X is “all the money in the world”. But when you start buying stuff with it, all of a sudden it isn’t.
If the market goes belly-up and you can’t find a buyer, how SOL will you be? If you can “only” (lol) afford the smallest unit in the building, I don’t think it’s a reasonable idea at all. If you COULD afford a larger unit, but are choosing the smallest unit so you have more liquidity, I think it’s a good idea.
But I’m going to go with what someone said above… if you even have to ask this question, it’s probably not a good idea.
That’s a ridiculous notion. My job is to answer these kinds of questions for ultra high-net-worth individuals on a daily basis. She can have valid questions about purchases just like anyone else. If she didnt, she would be foolish.
My opinion… if you’re choosing the maid’s quarters because you can pay cash… then it sounds like a good idea. It definitely doesn’t sound like a short term investment and if you think that you’re going to sell in about 2 years… I personally would go elsewhere. But, for a cash investment… as long as you can lease the space… it doesn’t sound too bad since you have to live somewhere.
It would be a jumbo loan.. but…
Right now it is a ‘hot new development’ and she’s looking at the shanty on the corner (no balcony, etc). So long as the development is still selling new units, hers will be a used unit. So, if a new unit is still selling for $1500/sqft, then her’s is only worth $1200/sqft. And that will be the case until all of the units have sold out.
IF the development has sold out in the next two years… then there will be no more web site, no more marketing push… just the equiv of an HOA.
SO, then the fees which are probably quite low right now for marketing purposes… will start to reflect the real costs. But the average owner in this development has paid at least $2million or more… so, when the fees hit $1400/mo, sure they’ll grumble, but that’s the price of the environment.
So, now you’re selling the shanty on the corner w/enormous monthly fees (btw, you could buy a who extra house for $1.4k/mo).
SO… if she wants to live there, then go for it. If she’s looking for an investment… I find it really hard to believe this is a good investment property unless she intends to own it for at least a decade.
I’d never buy a condo, just because I’d be at the mercy of property management and their condo fees.
Hotel condos can be difficult to finance (a lot of banks are still unfamiliar with them; it’s a fairly new idea.) They can also be extremely hard to sell. Most people looking to buy an apartment don’t really want to live in a hotel.
You have to factor in the maintenance costs (which will increase with time) on top of whatever mortgage you’re going to pay, and you need to think carefully about whether the expense compared to a similar-sized non-hotel condo makes sense for your situation.
Personally, I think now is a great time to invest in real estate, but I have never seen a hotel condo project that I thought was a good investment. That doesn’t mean I’m against buying them; if you want (and can afford) a luxury pied-à-terre, go for it. But don’t expect it to appreciate in the manner of a more traditional home, and don’t expect to be able to sell it easily.
I can’t understand why anyone would pay shitloads of money to live in a festering shithole of a city.
It’s Toronto, not Detroit.
You lost me at “no balcony and no view”. I can’t be the only one who thinks for that kind of money, I’d better get a balcony with a view. If you’re cool with it, ok, but surely it will make it hard to resell.
I doubt if there will ever be much demand for an extremely expensive tiny condo with a crappy view when compared against nice houses in the same neighbourhood, for most people want to live in something larger. If you want to get your money out of the place, go with a home across the block on the other side of Avenue Rd., and indulge yourself with deliveries rather than room-service, and house-calling masseurs etc. rather than hotel ones.
I don’t know anything about Toronto geography, but I copied the location code from the listing from the Four Seasons and found 2 other over 2x as big and very nice/updated/etc condos for right around $1 million and a bit less in the same area on ReMax, in like ten seconds.
MAYBE if that million paid for unlimited room service, valet, massages at the spa, etc…otherwise, I think you crazy.
I think having access to other areas like the spa and lobby would make it easier to live in a 950 sq foot place than it would be otherwise. The huge monthly fee would be a deal breaker for me though. As the above poster noted, you could probably pay for a ton of deliveries with that money. 
Old joke that might apply here
Which of the following is not the same as the others:
- Herpes
- Syphilis
- A 1M condo in Toronto
Answer: The correct answer is 2. Syphilis. You can get rid of syphilis. 
With a hotel condo you get the vacationing Griswold family for company in the pool.
If you intend to stay in Toronto for many years, consider getting a nice place with a good club in the neighbourhood, such as the Granite Club.
Haven’t you got the order wrong? It’s potentially lethal to eat catmeat without cooking it first.
For years, my dad has wanted a condo in this one particular building in Las Vegas. Gorgeous building with beautiful units-- seriously, the nicest condos I have ever seen in my entire life. Everything is over the top-- the lobby, the wine cellar, the spa, the salon, the in-house masseur, the butler, the grounds, the valet, on and on-- and that’s not even talking about the custom, imported, spacious, amazing Strip view having units. For a long while, those units were selling for $5,000,000 and up. I looked at one about three or four years ago, that had previously sold for $12,000,000 and was on the market for $3,400,000.
In the last six months, one of the units in that building sold for $600,000. Now, this is not a building with any particularly questionable units-- they’re all 2000 sq ft plus with large balconies and private elevators. The $600,000 unit had previously sold for over $6,000,000. The luxury condo market in Vegas just took that much of a dive.
Here’s my point: you’re almost always going to be better off waiting a year and buying something from someone who needs to unload for one reason or another. I don’t know about Toronto, but in Las Vegas (admittedly, one of the most real estate depressed area in the US) a little patience could save you literally millions. There is a HUGE influx of units for sale. Stuff that was previously “only” a million is now selling for a fraction of that.
Why spend a million when you can wait a little bit, probably spend half of that, and get just as many awesome amenities?