As a financially savvy person, you know the importance of preparing for your future. Ideally, it starts when you’re young, by setting aside a portion of every paycheque into a savings or investing account. Even if it’s a few dollars here and there, the future rewards can be substantial as you get older.
Should you ever consider investing in condos as a way of securing your future? Getting into real estate might seem intimidating. It sounds like something for when your life is a little more established and you feel a little more secure. However, this is not a step anyone “feels” ready for. It’s a decision based on analysis and consideration. Just think: Some of the most successful people you know of are just regular folks who kept their eyes open for opportunities big and small. Let’s take a quick look at the ins and outs you need to know about investing in condos in Etobicoke.
Knowledge and Research Are Essential
Buying an investment property is typically a challenging and nerve-wracking venture, especially when it’s your first. Where do you begin? You will need access to some funds initially, especially in Etobicoke, where the average values are higher than the rest of the province. However, money is actually not your most vital resource.
Your single most valuable asset when investing is knowledge. A keen insight into the ebbs and flows of the market is essential. Without it, you can get overconfident when things are going well. And you might panic at the hint of a market downturn where properties start losing value.
Successful investing requires a cool head and an instinct as to what properties will produce the highest return in the long term. For that, your best resource is a local real estate agent who has experience working with investors at all levels.
Understanding the local real estate market is the first step to investment success. The following resources will help:
- What You Should Know Before Buying A House With Someone Else
- Real Estate Fraud? Yes, It’s A Thing
- What Is the Real Estate Closing Process in Canada?
What Resources Do You Need?
When buying your primary residence, you need 5 to 20% upfront for your down payment. But investment properties are different. If you purchase a condo with the intention of renting it out, you need 20% upfront, regardless of the price. In addition, you should have an emergency fund set aside to cover any unforeseen problems or to carry your monthly costs while searching for the right tenant. Where does this money come from?
If you currently own a home, you might be able to pull out some of your equity to use toward your down payment.
Why Invest in Etobicoke?
As part of Toronto, Etobicoke is in high demand, with potential tenants scrambling to find a suitable rental. Humber College and the University of Guelph both have campuses here, which means there are always plenty of students looking for housing. However, the good news is that Etobicoke is not “party-central,” which means you’re more likely to find tenants who will respect the rules and care for your condo.
Why Invest in Condos?
Condos are ideal as a first investment or even to add to your portfolio because they typically cost less than a detached home. That said, it’s essential to be aware of the hidden costs and challenges that condos present.
- Maintenance fees are one of the most significant fees to be aware of. The costs are on top of your mortgage payments. If you miscalculate, these fees could eat into your profits and even make your investment unviable. In addition, these fees are subject to increases every year.
- Each building has its own set of rules and bylaws. These regulations can be off-putting to prospective tenants if they are too stringent.
- Condo prices are high in Toronto. Even though condos are more affordable than other types of properties, they are still out of reach for some investors.
Before investing in a condo in Etobicoke, it pays to perform due diligence. An experienced local real estate agent can help you, from spotting undervalued opportunities to finding and vetting tenants to make your investment profitable.
Looking for even more information about investing in condos? The following posts will give you food for thought:
- 5 Signs the Condo You’re Considering Is a Bad Investment
- 5 Things to Look For in an Investment Condo
- Should You Buy a House Close to a School?
The Upsides of Condo Investing
You’ve done your research. You’ve selected a local real estate expert to guide you through the investment process. You’ve taken stock of your resources, and you can comfortably afford a down payment, with a financial cushion left over for emergencies. Check, check, and check! If you’ve done your homework and have decided to proceed, condo investing also offers many advantages:
High demand: With the growing population in Etobicoke and the lack of housing supply, rentals are in unprecedented demand. This means you’ll likely have a vast pool of qualified tenants to choose from, and your condo will not sit vacant for long.
Passive income: Earning money without punching a time clock is a dream most people can’t even fathom. A good tenant who pays their rent on time and takes care of the property is one of the few ways to make it happen.
Low maintenance: Most condo buildings have a management company to take care of all maintenance of the common areas. With no lawn care or snow removal to worry about, your unit becomes even more appealing to prospective tenants.
Potential for equity gains: As your condo rises in value, so does your equity and purchasing power. You can let it continue to grow, or cash out your equity to fund another investment.
Cash-out value: If real estate values continue to rise, as they almost certainly will, you can sell your condo a few years from now to fund your retirement or travel dreams.
Investing in real estate is never a decision you make lightly or without due diligence. However, with expert guidance and careful planning, condo investing might just be the perfect path to a bright and prosperous future.
Do you want to know more about the risks or benefits of buying a condo in Etobicoke? We are standing by for all of your questions. Reach out to us right here or call 647.232.7317 for more information or to get started.