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JEREMY SHIFTLER
Buzzer
reply 161 vote 1
 

House vs Condo: Which is a better investment?

What is a better investment, a resale house or a pre-construction condo?
13
Canada / General Chit-Chat
 
 
 
ARA MAMOURIAN
Buzzer
reply 74 vote 12
 
 
1 BEST REPLY
@Jeremy, If you're looking for positive cash flow you will likely have better luck with a duplex/triples/fourplex. I have rarely seen a condo (pre con or resale) generate positive cash-flow unless you have a massive down payment. If you have the budget and are prepared to be a good landlord, a house with a minimum of 2 (but most likely 3) units would give you the best chance of generating positive cash-flow. Plus, IMO a condo isn't the greatest long term (beyond 10yrs) investment: Higher maint fees, always something newer, better, shinier (there are exceptions to the rule of course). A house on the other hand, if maintained well, can be a forever investment.
 
 
 
MARCO DIFOTI
Senior Buzzer
reply 529 vote 33
 
 
No matter a condo or a house, you must always do your homework and consider the neighbourhood you’re buying into.
Never forget the axiom “location, location, location” which is true for both a condo and a house!
Both are a significant investment, you should feel go with you gut and why in an area were you can nurture your investment.
Preconstruction condos offer a great mid-term investment. You are buying with little down, and if the APS is worded correctly, you can assign it before you even have to pay the land-transfer costs! Of course, you can also keep it and rent it out. Great!
In the long term, 25+ years, land is king!
 
 
RICHIE YU
Buzzer
reply 21 vote 2
 
 
to add to "location, location, location", look at key indicators like population growth, job opportunities, capital investments by the city and industry. Are there amenities (I'm not talking about the pool in the condo, more the proximity to the highway or subway station or a university) that are in demand or will be in demand? Run it like any other business, who's your potential buyer, where are they coming from? what do they like? The more "things" your property has that attract different groups/types of potential buyers, the higher the potential for a better yield.
re: land - farm lands are popular with wealthy families, so I hear. Between property tax breaks, potential cash flow, land banking, and tax breaks with proper estate planning.
Richie Yu
www.richieyurealestate.com
 
 
CHRIS
NewBee
reply 1
 
 
Jeremy said:
What is a better investment, a resale house or a pre-construction condo?

I'm going with Condo for Leasing abilities because of the huge boom that is hitting Toronto and the increasing amount of people coming for work or to make a foreign investment.
 
 
AMIT BHANDARI
Buzzer
reply 162 vote 12
 
 
This is such a hard question to answer without knowing what the end-goal is...
 
 
JEREMY SHIFTLER
Buzzer
reply 161 vote 1
 
 
The end is is really pretty simple. I would like to buy more property in Toronto for the purpose of renting out, and have some cash flow. I am more interested in the capital gain of the property, but want to be positive year to year on cash flow.
 
 
AMIT BHANDARI
Buzzer
reply 162 vote 12
 
 
Haha..It's not that simple...

House in Toronto/Resale: You'll be paying a lot higher $/sqft. Closing is much quicker and so costs kick-in straight away. Search for tenant kicks-in straight away. Managing tenants kicks-in straight away. Growth happens year over year but off-set by on-going costs so you better work-out costs v.s. capital gains and see how much you actually gain. NET.

Pre-construction: All of the above is delayed by X years depending on when completion happens. Benefit here is that developer driven / market driven appreciation occurs in the background without you closing on anything. Plus your TODAY's deposit is on TODAY's price for a piece of property closing in the future. If the "value" appreciates the deposit you paid today represents a smaller amount in the future so you are leveraging.
 
 
ANONYMOUS
 
 
 
 
MICHAEL B
Buzzer
reply 52 vote 5
 
 
Can't beat your own land
 
 
ANONYMOUS
 
 
each scenario is different and needs to be custom tailored to suit the objectives of the prospective owner.
 
 
ANONYMOUS
 
 
I'm totally biased, as I love condo apartment living in the City. Small spaces and the absence of actual land have never been a concern as a real estate investment for me. A house is a ton if work and requires on-going maintenance in order to keep up its property value. You almost need a team of people to maintain a house. Being a landlord can be even more difficult with a house, as more things seem to go wrong.
I do agree, however, that once a condo apt building ages (and in the longer term) then maintenance fees can be relatively expensive. So pick a great new condo builder that manages their properties well, rent it out in your case, and then sell your unit in 5 years.
And don't be scared to stage and plant gardens in containers on your balcony or terrace when you are going to sell.  Like good interior design, having a stylish outdoor space (rather than be just used for bicycle storage or just plain bare) can go a long way in getting it sold!
 
 
MONA LISA GREY
NewBee
reply 7
 
 
Chicken or egg? Depending on your needs and preferences.
Houses in general have done in appreciation, cash flow, government grants, tax credits and rebates.
Condos do well in large cities but not as good as a house.
My opinion!!
 
 
MONA LISA GREY
NewBee
reply 7
 
 
Chicken or egg? Depending on your needs and preferences.
Houses in general have done in appreciation, cash flow, government grants, tax credits and rebates.
Condos do well in large cities but not as good as a house.
My opinion!!
 
 
 
 
 

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