As new condo high-rises continue to dominate the Toronto skyline, many investors and persons looking to own a home often wonder whether buying a condo is the way to go or if they should consider other residential real properties, such as detached homes. According to data, condos are a great investment as their demand and value have increased steadily over the years. But, as with every investment, there are pros and cons to buying a condominium which you should thoroughly weigh if you’re considering investing in one.
In this comprehensive guide, we explore everything you need to know about purchasing a condo in Toronto in 2023, including the pros and cons and factors to consider when purchasing a condo. This should help you decide whether a condo is a good investment choice.
Before we dive into the details, remember it’s highly advisable to work with a real estate lawyer in every property transaction. They help you review all the legal documents and offer expert advice to protect your interests and rights. Get in touch with LD Law Real Estate Lawyers for experienced legal guidance in all real estate matters, including purchasing condos in Toronto.
Pros of Buying a Condo in Toronto
· Affordability Compared to Houses
In an expensive Toronto real estate market, condos present an affordable investment. This makes them an attractive alternative to other expensive housing options in the city, such as detached homes. The affordability is made much more attractive by the fact that most condos are in desirable neighbourhoods where houses in the same locality would be out of the average person’s budget.
Because of their affordability, condos have become an increasingly popular choice for first-time homebuyers, persons looking to downsize and new real estate investors.
· Access to On-Site Amenities
One of the biggest advantages of condos is the shared amenities they offer. These include swimming pools, fitness centers, shopping centers, basketball courts, clubhouses, gardens and more amenities that are usually accessible to all residents. Such amenities are expensive to maintain or access in a single-family home setting.
On-site amenities are often included in the condo fees and add to the property’s value.
· Low Maintenance
A condo requires much less maintenance and repair than single-family properties. Why? First, you’re only responsible for maintaining the interior of your condo. No painting the outside walls, changing a leaky roof or worrying about other parts of the building. As a condo owner, you pay a monthly maintenance fee to your condo corporation to handle all maintenance and repair responsibilities within the condo complex.
Also, a condo requires less time to do maintenance and repairs compared to other housing options, saving you time. You won’t be trimming a yard or cleaning the gutter because your condo association takes care of it. This makes owning a condo ideal for busy individuals who travel for work and people with minimal time to dedicate to the maintenance of a property.
One of the most obvious benefits of purchasing a condo in Toronto is the location. A condo in Toronto gives you easy access to amazing restaurants, entertainment joints, public transportation, business districts and more. In downtown Toronto or other high-demand areas, all the major amenities will be within walking distance or a few minutes’ drive from your condo building.
For investors and persons looking to rent out their condo units, Toronto will always have a demand for good housing as the city continues to thrive. Having a condo in such a prime location may be a worthwhile investment.
Safety is always a priority when looking for a home or long-term investment property. Many condos provide lots of security compared to single-family homes. For starters, most condos have restricted access, a doorman or security guards, ensuring that only the residents and invited guests can access the property. This reduces the dangers of break-ins and thefts, giving you peace of mind even when you’re away from home for long periods.
· Built-In Community
Condo owners are part of a large community within the same condo complex. The proximity to each other and shared amenities make it possible to form meaningful relationships with the neighbours and even make good friends. This sense of community and social interaction may take lots of work to find in single-family houses.
· Potential for Appreciation in Property Value
Since Toronto is a diverse and vibrant city that continues to thrive and attract more people, the demand for housing, such as condos, will always be on the rise. This means that the market value of a condo in Toronto will likely appreciate over time. This is important not only to investors looking to buy condos and sell them after a few years but also to homeowners, as it increases their home equity.
Cons of Buying a Condo in Toronto
· Lack of Privacy
One drawback of condo living is the lack of privacy normally offered by other housing options, such as a detached house. Some condo units are in the middle of the hallway, with neighbours on all sides. For people who enjoy peace and quiet, a condo with thin walls and rowdy neighbours may not be the best residential option. Fortunately, some condos have enough space between them, averting noise and disturbance from the neighbours.
The luxurious amenities, common areas, and security provided to the residents by a condo complex come at a monthly condo fee. This fee is used to maintain amenities, security services and conditions of the complex at large. The monthly maintenance costs can be quite a big percentage of the budget set for the monthly condo payments. It can range anywhere from $100 to $1000, depending on your condo size ($0.5 to $1 per square foot). Keep in mind that the monthly condo fee tends to increase over time.
Although the condo fee tends to be high, it goes towards maintaining the amenities and services that drew you to the condo complex in the first place. And for those looking to rent out their units, these amenities may attract clients. However, an increase in condo fees can cut into your profits.
· Limited Space
If you compare a single-family house and a condo, it’s obvious that some condos offer less space, including living, parking and storage space. This means you’ll have less space for your personal belongings and may require you to downsize. Also, although a 60th-floor condo balcony offers a great view, a backyard offers more space and versatility for you and your family. Some condominiums do offer each condo unit a storage space, but this space can be small.
Even if your condo has limited space, remember you can access the whole condo complex. Therefore, you can enjoy the rooftop terraces, swim, and interact with your neighbours in the community space.
· No Land Ownership
When you buy a condo unit, you only acquire your living space but not the land beneath it. You and the other residents share an interest in the land but do not own it. In single-family houses, you own the entire property, including the land. This means that all the maintenance and repairs will also fall on you.
If you’re not interested in owning land or the maintenance duties that come with it, then a condo is a good choice for you.
· Strict Condo Association Rules
Living in a condominium comes with certain condo association rules that help govern the community and make life better for everyone. Some rules include no pets or a limitation to pet sizes and types, the renovations you can make in your condo, what you can place on your balcony, how and when to utilize shared amenities, restrictions on rental units and more.
Although rules are put in place to protect and govern the community, some of them are restrictive to some people. For example, some condos only allow renting of condos for at least six months. This rule is restrictive to investors, and they’ll lose some clients who want to rent the unit for a few days or less than six months.
When searching for a condo to invest in, it’s important to enquire about condo association regulations to ensure that you’re part of a community that suits your lifestyle and needs.
How to Decide If Buying a Condo in Toronto is Right for You
Purchasing a condo as a home or long-term investment is a big decision, and it’s important to consider all your options before committing. To help you decide whether investing in a Toronto condo is right for you, we’ll discuss several factors you should consider before making a purchase decision.
· Consider Your Lifestyle
One of the most important factors to consider before buying a condo in Toronto is your lifestyle. Are you someone who loves city life? Do you value access to luxurious amenities in exchange for monthly maintenance fees? Or do you prefer a quiet life and a backyard where your kids can play, and you can hold barbeque parties?
If you enjoy living in the city, access to many amenities and a low-maintenance lifestyle, then a Toronto condo is right for you. However, if you love lots of space and a quieter suburban lifestyle, consider other housing options, such as single-family homes. Make a list of all your priorities and preferences to help you decide if a condo in Toronto suits you.
· Evaluate Your Budget
Buying a condo is a huge investment, and it’s important to consider your budget thoroughly. Although a condo’s purchase price is lower than single-family homes, condo ownership comes with some additional expenses, including monthly maintenance fees, mortgage payments, property taxes and potentially higher utility bills. It’s important to carefully evaluate your budget and determine if you can comfortably afford this extra expenses long-term.
A condo’s down payment is also higher than that of other housing options. If you’re straining to accumulate money for a down payment, you should postpone buying a condo until you have enough money for the down payment and other costs.
· Think About Your Long-Term Plans
Consider your long-term plans when deciding whether to buy a condo in Toronto. Will you live in the city for the foreseeable future, or are you likely to move to another location? Are your housing needs likely to change in the near future? If you’re going to stay in Toronto long-term and your housing requirements are likely to stay the same, then a condo may be a great investment for you. However, if you’re going to move to a new city in a few years or anticipate your housing needs will change, you should consider other housing options for now, such as renting.
· Research The Real Estate Market in Toronto
The real estate market is always changing. Therefore, evaluating the overall health and prospects of the condo market you wish to invest in is important before making a purchase decision. Check current market trends, including recent sales data, property values and vacancy rates. An experienced real estate agent can help you establish the overall state of the current market.
By considering the above factors, and other important personal factors, you can make a well-informed decision about whether investing in a condo unit in Toronto is right for you.
Tips for Buying a Condo in Toronto
If you decide that living in a condo right in the heart of Ontario is right for you, then make sure that you buy a condo that meets your needs. Remember that buying a condo is different from buying single-family housing options, and it’s essential to go about it correctly. Here are a few tips to help you buy a condo in Toronto.
· Work with A Reputable Real Estate Agent
A local real estate agent understands real estate better than you do. Although a good agent comes at a cost, they’ll help you find the right property, negotiate the purchase price, and offer valuable advice throughout the buying process. Working with a reputable real estate agent with experience in the condo market saves you time and money and helps you mitigate risks.
· Research The Condo Building and Management
When you find a condo you love, it’s important to research the building and management before purchasing it. Check if the complex has all the necessary amenities, such as parking, fitness centres and security. If it’s already a completed building, check the maintenance history. You should also do a deep dive into the building’s management company to check if they have a good reputation and the quality of their services.
· Review The Condo Association’s Bylaws and Regulations
A condo can meet all your needs, including great location, enough space and excellent amenities but fail to align with your lifestyle because of the rules and regulations. Therefore, before buying a condo, go through the rules and regulations to ensure you’re comfortable with them.
· Get A Thorough Inspection
Before making a purchase decision, you should get a thorough inspection done. A condo inspection includes checking the electrical, plumbing and other systems to ensure they are in perfect condition.
· Get Legal Advice
A real estate lawyer plays a vital role in the purchase and sale of any real estate property, including condos. They protect your rights and interests throughout the transaction and ensure fair purchase terms. They also help you obtain good condo financing rates and mortgage repayment conditions.
Get in touch with LD Law Real Estate Lawyers for expert legal advice when looking to purchase a condo.
Just like with any other property, there are certain factors that you should weigh before making a condo investment in Toronto, including all the possible pros and cons. If you consider these factors and purchasing a condo seems like the right decision, you should go for it. However, you should always know what you’re getting into to avoid future regrets. Do your research and retain expert agents and real estate lawyers to help you make the right decision and complete the transaction.