Every year, renters across the GTA consider purchasing a condo. Many of these first-time buyers hesitate, and for good reason. Buying property is a big decision—one that requires careful consideration.
On the one hand, I find few things as rewarding as helping a long-renter find the home of their dreams. On the other, condo ownership isn’t for everyone. In this post, I’ll look at the benefits of buying a condo vs renting. I’ll also look at some of the factors you should consider if you’re thinking of making the leap.
Current Market Factors
It’s no secret that Toronto’s condo market has been red hot this year. In the first quarter of 2018, prices were up 9% on a year-over-year basis. This means that condo buyers paid an average of 9% more than they would have at the same time last year.
Experts predicted that prices and sales would slow down in the second half of 2018. We aren’t quite there yet, but the shift seems to have started. May’s benchmark condo price rose 8.3% year-over-year, the smallest increase in almost two years.
There are also reports that demand is down, as some developers have been using incentives to attract buyers.
For prospective first-time buyers, this is good news. While the condo market is still healthy, it’s starting to cool slightly. If you’ve been thinking of buying a unit, now might be the time to start looking around.
The pros and cons of buying a condo
In any market, there are potential upsides and downsides to buying a condo.
It’s an investment
No matter how you look at it, condos in Toronto are a good investment. Central locations with convenient access to transit lines (like the Yonge and Bay Street Corridors) offer particularly high returns.
You can reap the rewards now
If you buy a unit as an investment property, renting it out can provide an immediate source of income. Recently, many condo owners have chosen to go those route—and thanks to rental market conditions, they’ve reaped the rewards.
It’s your place
When you buy a condo, you can customize your living space in ways you never could as a renter. Of course, it’s important to consult with your condo association about any remodeling work you want to do. But the freedom to make these changes is a unique benefit of owning a unit.
Of course, there are aspects to owning a condo that some people don’t like—and maintenance obligations is one of them. While owners’ responsibilities for repairs and upkeep vary from building to building, you can count on having to deal with more of these issues if you purchase a condo.
You have to pay additional costs
When you’re considering buying a condo vs renting, it’s important to think about costs. Apartments typically come with one or two monthly expenses (rent, or rent and one or more utilities). But condo owners also have to factor in other costs, like maintenance fees and property taxes.
Once you reach the end of a rental agreement, packing up and moving out is simple. While selling your condo can provide you with some serious cash, it can also be a hassle if you want to leave the city in a hurry.
Are you ready to buy your first condo?
Do you plan on staying in Toronto for a while? Are you comfortable with taking on the expenses and responsibilities that come with condo ownership? Most importantly, is it something you really want to do?
Some buyers jump into home ownership because they have the money to do so and believe it’s a natural next step. But when you get right down to it, the decision to purchase a unit is personal. Be sure to weigh the pros and cons so that you can make an informed decision.
Thinking of purchasing your first condo? I can answer any questions you might have about the buying process. Get in touch, and we can discuss your needs!