Condo Investment

[carpanatomy]

What will you guys pay between $25k - $30k for a 2 bedroom (or 1 bed room + den) condo in downtown Toronto?

I am thinking of buying a condo, and rent it out, hopefully the rental will covers my mortgage, maintence, and property taxes.

Will this be a good idea to invest a condo, that I will not be living in it, but is hoping it will pay for itself in many years by renting it out?

Thanks.

[cassius]

Don't count on it paying for your mortgage, condo fees and taxes. It's a renters market out there right now with much demand but even more supply in my opinion.

[kyser soze]

I'm doing that right now...You Don't make money. Be prepared to spen 4-5 hundred per month to cover. Don't forget the income taxes you will have to pay as well. Only the interest portion of mortgage is tax free.

[rbt]

What will you guys pay between $25k - $30k for a 2 bedroom (or 1 bed room + den) condo in downtown Toronto?

For a typical cityplace style condo? Not a chance.

[carpanatomy]

whoops, please excuse my typo, i meant $250k - $300k condo.

I was thining of getting the condo near U of T campus, within walkable distance, and a 2 room condo (or 1 + den).

Looking for new developments of less than 5 years.

Philosphy is easy, rent this unit to two students, and each pays about $700 - $800 per month, so I will be getting $1400 - $1600.

I think it's quite a reasonable price to rent.

[salvius]

Yeah, this is not going to fly.

[cassius]

Even if you're not getting in rent enough to cover all the expenses and you take a monthly "hit", it doesn't necessarily mean it's a bad investment. What would be is if you rented it out, had the rent cover costs and then didn't have enough cash-on-hand to pay if for whatever reason the rent didn't cover your costs. Say your tenants unexpectedly moved out, or didn't pay for a couple of months etx.

Keeps things like broken appliances, smashed walls etc in mind. Those are things you'd probably be responsible to pay to fix.

[valantino]

there are much better investments out there then to buy a fairly new condo and rent it out - especially to students

[kyser soze]

I would never rent to students... I have seen way to many party houses/condo's
Make sure you can carry the unit yourself with or without tenants. Keep in mind it takes a long time to kick someone out the "right way". I know people that waited 6-8 months on properties.

[KGB]

Real estate is almost never a "bad" investment....but dreaming of positive cash flows and big pops in equity isn't as realistic as it might seem...especially in the standard condo market, where you and 8 zillion other people are doing excactly the same thing (or trying to).

It's a renters market...being a landlord has a million problems...positive cash flows are not realistic...you will have to claim that income, which may put you in a crappy bracket...sell it and have to pay capital gains tax because it is not your principal residence...etc, etc.

Get creative, or ahead of the general condo investment crowd, and things can be much more lucrative. Might involve more money...or more risk....but those are what pay off in the end.

Good Luck





KGB

[Mr Man]

I'm gonna echo what everyone else has said here and say it's a pretty bad idea.

In addition to reconsidering your expected occupancy, you also have to consider maintinance fees, insurance, property taxes and any other hidden fees. As KGB said, it's going to be a negative cash flow when all is said and done. Your only hope for making any money would be the appreciation component. And the days of double digit annual appreciation is probably finished.

There is money to be made in real estate, hell I do it for a living, but you gotta do your homework. You got to know whether you're getting a good deal or if you'd be better off with a CD at the bank.