New buyer, downtown condo market

[krawler1]

I've inherited a small amount of money and id like to put it to good use. Many people point me in the direction of real estate because of my situation. Right now I own my own home in Etobicoke, paid off but would like to add some property to my portfolio in hopes of making some extra cash on the side, more so than what I would make by hoarding my money in the bank.
Now feel free to correct me anywhere if im wrong.
I'm leaning toward buying a condo to start. Looking for a condo with easy rental potential as that is one of my main concerns, not being able to find a tenant. id prefer parking but not necessary and my budget is in the low to mid 300k range. In what parts of the city are HOT right now for renters? where are the areas that rent easily and find a condo with good ratios.
Some people have offered me advice and tell me to buy a boutique condo as they rent easily because the rent is cheaper but who would rent something that is 400 sq ft? I simply don't have the confidence in buying a place so small.
I am aware that by buying a condo I wont see my return in the short term but I'm hoping 30 years from now I can sell the unit for what I paid and have made money each year on this investment.
I'm not interested in preconstruction condos, the market seems saturated with them right now.

Any help or opinions would be appreciated. I have much to learn and I hope to one day become a knowledgeable investor.

thank you

 

[uto123]

Do you plan on using a Realtor? They may be able to help you find what you're looking for. But if you're planning on purchasing on your own, you may be able to save up to 2.5% on resale units and up to 4% on units from builders but would require additional work from your end as a new buyer.
For your budget, I think you would be looking at areas such as CityPlace, Liberty Village, and Fashion District (along King St W). There should be quite a few buildings constructed in the past 2-4 years and fits into your budget range.
If you're looking for a unit that includes parking/locker then your budget might be limited. Typically, I see lockers being rented out in my building for ~$50/mo and parking for $150-175/mo. This might give you a better idea if it would be worth it for you to extend your budget and look for a unit with a parking/locker.

Would you be looking for a unit you can buy and rent out right away? If you're willing to wait a bit for your money to work for you, you can look into buildings that will be completed in the near future instead of 3 years down the road.
The downside of buying pre-con is, then you have to worry about any time of closing costs, adjustments, development charges, levies.
However, as a person that is new and unfamiliar with the condo market, I find these hard to look for and takes time getting familiar with each builder's current projects.

As long the location is convenient, I don't think it would be difficult to look for a renter. Most places close to the downtown core have a pretty good walk score.

 

[TheKingEast]

I would never buy a condo (especially a newer build) to hold for 30 years. I think it's a very bad investment mainly because a) maintenance fees (they will continue to rise) b)special assessments are almost a guarantee over a 30 year span and c) I see many costly headaches with the newer condos based on how cheaply they are built.

For the long haul, I'd certainly save enough and buy a bungalow(outside of the core if necessary) rent out the top floor and the basement. Condos are short term investments IMO and even now I think they are a waste of money for investment purposes. The ratios will not look good when you add up all the costs.

Just my opinion.

 

[uto123]

I would never buy a condo (especially a newer build) to hold for 30 years. I think it's a very bad investment mainly because a) maintenance fees (they will continue to rise) b)special assessments are almost a guarantee over a 30 year span and c) I see many costly headaches with the newer condos based on how cheaply they are built.

For the long haul, I'd certainly save enough and buy a bungalow(outside of the core if necessary) rent out the top floor and the basement. Condos are short term investments IMO and even now I think they are a waste of money for investment purposes. The ratios will not look good when you add up all the costs.

Just my opinion.

This is true too...
I have friends living in Alberta and the same 1+1 condo would cost $100,000 less and easily rent out for the same as downtown Toronto which makes me wonder why anybody would buy into Toronto housing market as an investment.

 

[TheKingEast]

This is true too...
I have friends living in Alberta and the same 1+1 condo would cost $100,000 less and easily rent out for the same as downtown Toronto which makes me wonder why anybody would buy into Toronto housing market as an investment.

Because a lot of people are late to the show and still think they can make a bundle because their investment will appreciated by 10% each year.

 

[uto123]

Because a lot of people are late to the show and still think they can make a bundle because their investment will appreciated by 10% each year.

There are many that are late to the show, but I think housing prices will still continue to appreciate this year.

 

[Auraz]

If you currently own a property in Etobicoke. Then you are familiar with the boom happening at Parklawn. Westlake Village(Metro Groceries downstairs) is begging for rental units to become available as the demand is huge. Prices are reflecting downtown rent prices but the price for properties here is still quite low. The building beside Westlake 'Key West' which is still under construction but occupancy is slated for Spring of this year. Has the lowest maintenance in the whole area. 'Times Group' a very reputable green developer. I was impressed with the finishes of the suites and most floor plans where adequate. If you are going to have a rental property it's best to take care of it that's nearby your home. This area still has a potential for a lot of growth. I'd stay away from anything Monarch built here. Key West will be the lowest cost to maintaining said unit. They even have roller shades for all suites. Builder paid a lot of attention to detail and it shows! If you are interested in viewing the model suites or getting more info on both Westlake and Key West. Please feel free to shoot me a message.

 

[Ric]

If you currently own a property in Etobicoke. Then you are familiar with the boom happening at Parklawn. Westlake Village(Metro Groceries downstairs) is begging for rental units to become available as the demand is huge. Prices are reflecting downtown rent prices but the price for properties here is still quite low. The building beside Westlake 'Key West' which is still under construction but occupancy is slated for Spring of this year. Has the lowest maintenance in the whole area. 'Times Group' a very reputable green developer. I was impressed with the finishes of the suites and most floor plans where adequate. If you are going to have a rental property it's best to take care of it that's nearby your home. This area still has a potential for a lot of growth. I'd stay away from anything Monarch built here. Key West will be the lowest cost to maintaining said unit. They even have roller shades for all suites. Builder paid a lot of attention to detail and it shows! If you are interested in viewing the model suites or getting more info on both Westlake and Key West. Please feel free to shoot me a message.

I totally disagree. The Etobicoke waterfront is a value trap. The area though nice is void of decent public transit. You need a car to live in this area and retail shopping is non existent. Also, there are tonnes of new development (Mr Christie's redevelopment etc.) scheduled to come in the future that will keep price increases in check. I think Fort York is a much better option. Closer to the core, better transit and no need for a car. Also, with the new Loblaw's development underway, I see this area increasing in value substantially as retail /shopping options improve.

 

[Auraz]

I totally disagree. The Etobicoke waterfront is a value trap. The area though nice is void of decent public transit. You need a car to live in this area and retail shopping is non existent. Also, there are tonnes of new development (Mr Christie's redevelopment etc.) scheduled to come in the future that will keep price increases in check. I think Fort York is a much better option. Closer to the core, better transit and no need for a car. Also, with the new Loblaw's development underway, I see this area increasing in value substantially as retail /shopping options improves.

Fort York is a dead zone. Bathurst is completely clogged all days of the week and with further expansion of the airport. Nightmare traffic situation. Mr Christie is a commercial redevelopment. What makes you think it'll be condos? Be a tough sale with no lake views?

Public Transit is not needed if uber is there for who ever needs it to get downtown. Public transit will only improve in this area. Ive never heard anyone say they "love" living in Fort York. With Parklawn you are also getting an influx of people from the east regions of Ajax, Whitby, Oshawa coming in who want to be near the core but not in it. Also west end job market is still very much present so the demand here seems to only warrant further growth. Fort York has one building left to build. "Lakeshore Condos" are sandwiched in on the corner of a busy busy intersection with tiny units. Loblaws won't save this area.

 

[Migos]

Fort York is a dead zone. Bathurst is completely clogged all days of the week and with further expansion of the airport. Nightmare traffic situation. Mr Christie is a commercial redevelopment. What makes you think it'll be condos? Be a tough sale with no lake views?

Public Transit is not needed if uber is there for who ever needs it to get downtown. Public transit will only improve in this area. Ive never heard anyone say they "love" living in Fort York. With Parklawn you are also getting an influx of people from the east regions of Ajax, Whitby, Oshawa coming in who want to be near the core but not in it. Also west end job market is still very much present so the demand here seems to only warrant further growth. Fort York has one building left to build. "Lakeshore Condos" are sandwiched in on the corner of a busy busy intersection with tiny units. Loblaws won't save this area.

Billy Bishop airport is not expanding. The Fed Liberals ruled it out already. If you're worried about "nightmare traffic", how does moving further west from the core help you? It only is helpful if you work west of the city. For a downtown worker, Fort York is preferable whether you drive or take transit.

Even if Fort York is and remains a deadzone, it is in walking distance to a bunch of amenities. The entertainment district is a few minutes away.

It sounds like you're a realtor for a few condos in Parklawn. Could you share some of your investment calculations so we can get an idea of what type of return to expect from this area?

Thanks.

 

[Auraz]

Billy Bishop airport is not expanding. The Fed Liberals ruled it out already. If you're worried about "nightmare traffic", how does moving further west from the core help you? It only is helpful if you work west of the city. For a downtown worker, Fort York is preferable whether you drive or take transit.

Even if Fort York is and remains a deadzone, it is in walking distance to a bunch of amenities. The entertainment district is a few minutes away.

It sounds like you're a realtor for a few condos in Parklawn. Could you share some of your investment calculations so we can get an idea of what type of return to expect from this area?

Thanks.

I grew up in the west-end I'm just knowledgeable on what's happening around here. I'm saying not everyone needs to live in the downtown core to enjoy downtown amenities. Taking Lakeshore from Parklawn is 10 minutes to Bathurst and Lakeshore. Entertainment District few minutes away?You're talking about driving right? Cause it's still a 20 min walk from dead zone Fort York. Nothing is special here or exciting. Ghost town next to the co-ops. They literally only have two decent buildings there. Investments? Look at South Beach Condos. Do you know how much they were selling for pre-con vs now? 30% easily. The area is going through a transition similar to Liberty Village in retrospect is that families and a younger generation are moving in. Parklawn will always be mix-generation neighborhood which helps an area grow and diversify. Just a little retail has come this way and there is so much excitement. Future is looking much more bright here than would be Fort York.

 

[Ric]

If you want to find out if an investment is good, check how many agents have bought into it. Good litmus test.

 

[drewp]

I think Etobicoke is a great option if you want parking. I think like Ric said, lake shore and park lawn is a "value trap"Agreed. Might as well go downtown and buy a unit without parking. If you want a good building and location in Etobicoke, I would look at Network Lofts at 2 Fieldway (next to the Islington subway) and very affordable. Or look at 15, 25 or 35 Viking lane next to the kipling subway. To me, these will hold value way more than a lakefront condo with a lake view that will be obstructed in the near future. Subway access is, and will be even more valuable down the road.

 

[ponyboy]

Rather than putting all your money into one asset class in one market (Toronto), how about diversifying to other continents (European ETF, Emerg Mkt ETF, or an international REIT if you want to stay in real estate). REITs will give you a bigger return without the hassle of being a landlord. Expecting big returns through capital appreciation is far fetched at this point in the cycle, and rental margins are razor thin or negative plus your time.

 

[Ex-Montreal Girl]

East York, specifically somewhere north of Danforth, south of O'Connor, east of Coxwell. Lots of post war bungalows that are still cheap, close to the subway and are getting snapped up for eventual tear-downs. Great starter homes. My sense has always been that getting from there to downtown is a lot easier than from the west side.