With housing prices seemingly at an all time high this past year, you may have been tempted to consider investing in a condo. Whether you are considering buying a condo for you and your family to live in or are looking to use it as an investment property, knowing when it is the right time to buy will help you maximize your investment potential.
When is the right time to buy a condo?
The short answer is that there really is no right time. The only thing you can really judge is whether the time is right for you. With constantly fluctuating prices and no concrete way to predict demand, getting into the condo market at the exact ‘right time’ is nearly impossible.
At ALLinREALTY, the best time for our clients has proven to be early in pre-construction phases of the hottest properties we’ve offered in Burlington and West Greater Toronto. As early access realtors with key developers, we’ve our client condos secured before the sales open to the general public. By that time, equity has often already been gained – and locked in!
However, there are a few factors you can look at to help you decide if now is the right time for you to buy a condo.
The health of the market
Doing some research into the health of the real estate market can help you make an informed choice as to whether now is the right time to invest. A market that is showing a significant upswing in condo sales might signify that it’s a seller’s market and therefore you’ll be looking at a higher purchase price than you might 6 months or a year down the road. On the flip side, if you’re looking to flip your condo, these sign might be exactly what you’re looking for.
Condos typically command a smaller mortgage and down payment than a single family detached or attached home, making them more affordable and in demand amongst those just breaking into the market. With the millennial generation reaching the age where they are ready to invest in their first home, there is likely to be an increase in the number of people buying condos in the coming years. More people buying means that you’ll likely have more competition when it comes to bidding on the unit you want. The best way to combat this competition is often to get into a preconstruction build and secure your investment early.
Whether you can afford it
When it comes down to it, market trends don’t have to dictate your interest in purchasing a condo. All that really matters is whether you can afford the condo you’re looking at purchasing. When deciding on the affordability of your potential purchase, make sure you’re not just looking at the down-payment and the mortgage you’ve been approved for. Monthly expenses like your mortgage payment, any HOA fees, potential maintenance fees and any necessary repairs all have the potential to significantly affect whether you’ll be able to afford your new investment.
Do you like the neighbourhood?
Regardless of whether you are buying a condo for yourself or you are planning to flip or rent it out, you want to be sure that the neighbourhood is one that you appreciate. In the case of renting, you want to feel comfortable that the neighbourhood will be attractive to your preferred renter demographic. If you’d like to rent to a family, the presence of parks, schools and shops will likely draw them in. If you’re aiming to find professionals as tenants, looking for something with proximity to the GO train or other public transit and convenient grocery shopping is sure to be the winning ticket.
In the event that you’re buying a condo as a starter home for yourself, considering features that might drive up property value in the coming years will help you maximize your investment. A condo located near public transportation lines, good schools, green spaces, park areas and convenient shopping is sure to increase in value as time goes on, regardless of how the housing market is trending as a whole.
Are you ready to commit?
At the end of the day, you really just need to be ready to commit to your purchase. If you are sitting with some doubt and find yourself second guessing your condo choice, you might not be ready to jump into the condo market yet. There’s no harm in waiting it out and watching to see what else comes onto the market before you dive into it. Who knows, the perfect condo might be just around the corner!
Condos can be your perfect next investment
As we reach the end of the covid-era, we’ll start seeing an increase in immigration and students entering the country for school so there will no doubt be an increase in the demand for condo purchases and rentals. Increased rental unit demand will naturally translate into good rental pricing power. Buying a condo now could set you up for a great return on your investment as these newcomers start looking for a place to call home.