If you have ever thought about getting into the real estate market in Toronto or the GTA as an investment? More recently especially with the amount of growth in the Condo Market with an up-rise with the new builds – there is no time like the present. One, the vacancy rate in Toronto is 1.3, so finding tenants for your rental suites will be a breeze. Two, today’s renters, especially the millennial generation, are happy to pay more to live in a brand new condominium. They appreciate the ease, comfort and convenience of condo living, without the maintenance of a low-rise home, and with an array of amenities under their roof.
Remember, real estate is a “real” investment that you can see, touch and visit to check on it. The condo rental market is always expanding as well, with baby boomers coming into inheritances, empty-nesters looking to right-size their lives, and even more families choosing to raise their children in condos. For your first real estate investment, consider a condo – it’s a wise move!
Much of the hesitance involved in purchasing a condo is simply due to the condominium fees associated with the monthly mortgage payment, along with the down-payment and monthly bills. Once a prospective buyer takes a moment to do the research and see what the breakdown consists of you will understand what it is you are paying for.
With condo fees you are responsible for the following costs –
The Reserve Fund
The first cost is the reserve fund. By law, owners need to set aside money to replace all of the common elements each year. Meanwhile, a home-owner sets aside nothing, and then gets hit with a bill for $10,000 for a roof or $5,000 for a furnace every few years.
The cost for utilities the Condo Corporation pays on behalf of the owners, like water, hydro and sometimes cable. Home-owners get individual bills for all of their utilities and they’re usually more expensive.
The Third cost the condo corporation pays for is the operation of the building itself. This can range from landscaping, to common areas such as pools. Tenants / Owners get to use these with no work involved. However, home-owners have to cut the grass, shovel the snow and look after the pool, if they have one.
So there you have it. Condo Fees are NOT an unnecessary expense but are really a value added benefit to most owners and tenants.