The benefits of condo living are well documented – affordability, security, high maintenance standards, social interaction and amenities, and easy access to transportation, shopping and entertainment to mention only a few.
But while people usually buy a condo to meet their lifestyle needs, it can also be good business. The features that make a condo appealing to people who buy them to live in are also features that make it a popular choice for renters.
The demand for adorable housing is rising, as the GTA’s population skyrockets (approximately 200,000 newcomers every year), and owning a home is becoming unaffordable for many. According to an RBC report, only one in five households actually make enough income to afford a home.
The GTA’s current housing market – with its tight inventory, high prices and strict mortgage rules has shut out so many first-time buyers from the detached housing market – they have turned to the condo market in droves and are driving up the condo prices.
In June 2014, the average condo price was $367,343 and by June 2019 the price had climbed to $590,274, up 60.1 per cent. For many renting a condo has now become the more affordable housing option.
In the past 40 years, Toronto has produced little purpose-built rental housing, leading to a reliance on the secondary housing market for rental inventory. The strong demand for rental condo units coupled with insufficient and constrained rental supply has created an attractive investment opportunity for investors.
So, is now the time for you to take some of the savings you have been investing and turn them to condo ownership? The real estate market in Toronto should be looked at as a long-term investment. It provides a tangible asset, compared to something such as stocks. When the real estate market takes a few dips here and there, it’s just a matter of time before it begins to climb again.
As long as you have good advice from a real estate agent on where to buy properties in Toronto with the best potential for earnings and fair market value, real estate offers a low-risk, high-return option. As well, should you choose to rent your property, you generate cash flow when someone else pays your mortgage.
Real estate investments are also the only investment you don’t have to pay in full upfront. You can put down a reasonable down payment and still build equity. This can lead to investment in further properties as you can leverage your equity and borrow up to 80% of your property’s current value. These loans come at a low interest rate and can be accessed via a Home Equity Line of Credit.