Investment Condominiums can be a great way to invest money, but when investing in real estate it's always important to be aware of potential issues before making a purchase. Simply being aware of the potential issues can help the person avoid them or minimize the impact. Those who are interested in condominiums for an investment in Toronto should consider the following.
Location is Important
When considering a condominium as an investment, location is one of the most important factors to consider. A prime Real Estate location means the likelihood that the condo unit won't sit vacant. Purchasing within the city means paying a higher price per square foot than in the suburbs but it also means getting much higher rents. The closer a tenant lives to their job or to the “nightlife” the less they have to spend on transportation and time for travel.
Be aware of Added Expenses
Condominiums often come with extra expenses not included in the purchase price. It's important to pay attention to these costs because they can affect profit margins. There is a difference in Land Transfer Tax for instance when closing on a property in Toronto compared to properties in the suburbs. Here is a great Land Transfer Tax Calculator for Toronto from the Toronto Real Estate Board.
Restrictions on Rentals
It is important for Investors to know that when leasing their unit to a tenant that the tenant must abide by all the rules and regulations set by the condominium. The great thing about Condominium Apartments is that they come with a built in management team. The Condo Corporation has an elected board of directors that govern the management company that oversees the caretaking and security of the building. They also enforce the rules and regulations. All residents whether owner or tenant must abide by these rules. Making sure your tenant is aware of these rules beforehand will ensure a pleasant tenancy.
If you have any questions please feel free to contact us and we will get back to you.