Top 3 things to look for when condo investing
By Condo Culture
Affordability, lower maintenance, strong rental demand > Condos present a tremendous investment opportunity. At Condo Culture, we recognize that investing in condos for the first time may be an intimidating experience. This is why our team of experts are committed to making this process easier and helping you realize the highly attractive investment potential for condo units.
This week with the help of Mike Green, Broker of Condo Culture Hamilton, we take a look at the top 3 things to look for when condo investing.
1. Price & Return on your investment (ROI) The first thing Mike suggests is looking at the price/sq.ft. relative to current market resale product and competing new project launches. You want to be sure that the price of what you are buying can’t be beat on the open market. Also consider your closing date. The longer the time frame the better, as it allows your locked in price to accelerate with the market.
The goal of any investment is to make a return. In real estate this can take the form of cash flow from a rental property or the investment appreciating in value over time. In the Kitchener, Waterloo, Cambridge and Guelph region for example properties have appreciated by 120% over the last 10 years providing substantial returns to investors.
When determining whether your investment would be cash flow positive, neutral or negative, there are many other factors that would need to be considered. These include your monthly expenses like mortgage payments, property tax, insurance, condo fees and the amount of rental income you expect to receive. The team at Condo Culture remains available to speak with budding investors to help determine whether an investment would achieve your cash flow goals .
2. Market Mike stresses that, "Not all markets are created equal. Some are trending in the right direction. Some are trending in the right direction but faster than others. Look for improving economic conditions that will translate down the road to upward pressure in prices". The Kitchener Waterloo region has been rated one of the fastest growing urban areas in Canada by StatsCan! This growth in addition to its diversified economy and investment in infrastructure makes it very appealing to investors.
3. A product you love Chances are, if you love it, someone else will love it too. This is true with most things, but especially true with real estate. When looking for an investment property, look for something that would appeal to the type of tennant or future buyer you want to attract . Factors to think about would be the building location, amenities, general overall quality, unit layout, direction, views and finishes. A quick tip from Mike, "Put yourself as close to transit as you can which typically means you have found all the lifestyle elements that most condo residents want from condo living."
Preconstruction condos can make awesome real estate investments. They offer great appreciation as the value of the project tends to increase once completed. After completion these units can also be used to generate positive cash flows through rental income. Mike adds that having first access to a project launch can be a great benefit to investors as developers will tend to increase prices shortly after launch as certain sales levels are reached. Condo Culture’s dedicated focus on condos means that we have unique insight and are highly knowledgeable about new condos projects throughout the region. Our experts are committed to getting clients early access to a project as soon as it becomes available.
With so many condo projects launching soon, be sure to join our ONE LIST designed specifically for investors to stay up to date and in the know.
Contact Us to connect with a Condo Culture expert for more information on this and other great investment projects/properties in the region.
Aerial photo of Circa 1877 courtesy of Adrian Stiles Photography.