Investing in condo units is a great way to break into the real estate market, especially as the market begins to cool and interest rates begin to raise. If you already own one or more investment properties, adding a condo to your portfolio is sure to be a great choice for a number of reasons.
8 Reasons Why Condos are a great investment choice
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Although many people seem to be moving out of the GTA in favour of a quieter life and lower cost of living, as long as people are working in the city there will be demand for condo units. There are a number of reasons why condos make a great investment choice including:
1. Less regular maintenance for the landlord
When buying a condo unit, you are often agreeing to pay condo fees each month or year. While it’s important to include this cost into your overall budget before committing to the purchase, knowing what the condo fees cover can help convince you of the added value. Condo fees typically cover many maintenance tasks like snow removal, lawn cutting, roof repair, window replacement, siding maintenance and the care of shared property. Having these tasks taken care of by the condo board means that they won’t be something that the unit owner has to worry about.
2. Lower insurance fees
Property insurance costs are relative to the size of the property, so it stands to reason that a condo unit is going to have lower insurance rates than a duplex or single-family home.
3. Pricing falls into the perfect middle ground
Whether you are a newcomer to the real estate investment space, are just starting out as a new homebuyer or are looking to downsize, the price of a condo is likely right in the sweet spot of what you are looking to spend. With the recent boom of people looking to buy real estate, especially outside of the GTA, single family homes, semi-detached units and townhouses are often quite a bit more expensive than a condo.
4. Included amenities can tip the scale
The amenities that are offered in a condo building can really help tip the scales for someone looking to rent your investment property or buy your unit down the road. Amenities like an site office space, a pool, shared greenspace, BBQ areas, a doorman, and designated parking spaces are often very appealing to potential buyers and renters. These extra benefits can also help justify your rent or selling price when you are looking to capitalize on your initial investment.
5. Competition remains low
With so many preconstruction condo buildings hitting the market, competition remains low amongst investors looking to buy. This means that when you do make an offer, you won’t likely be competing with a dozen or more other offers for the same space. When multiple offers come in for the same unit, buyers are stuck in a loop of trying to outbid each other, therefore driving the price up.
6. Even in a downturn, the value of a condo rebounds quickly
Although the real estate market is on a perpetual swing, condos seem to recover their value faster than other home styles. This can provide comfort to investors, especially if they are looking to buy during a downturn in the market.
7. Create cash flow while value appreciates
If you’re able to rent out your unit, either to a long-term tenant or using a short-term site like Airbnb, you’ll be able to earn am immediate return on your investment while the value appreciates over time.
8. Less likely to have upfront repairs
Many condos on the market today are pre-construction or new builds, so it is very likely you’ll be buying a brand new or almost new unit. This means that unlike a house that was built several years ago, a condo probably won’t have to do many or any upfront repairs before you move in or you rent it out.
Investing in real estate is always a good idea
Unlike the often-volatile stock market, real estate has repeatedly shown that it offers a solid investment opportunity. Whether you’re looking to go for a short-term investment and ultimately flip your unit or want to hold onto it long enough for the value to increase significantly, purchasing a condo as an investment opportunity is sure to be a good decision.