Real Estate Investment Options Part One
Wednesday, May 15, 2024
Have you been thinking about investing in real estate, but aren’t sure what kind of properties are available? Today we’ll begin discussing two common types of real estate investment options: investment condos and income properties. As you’ll learn, there are pros and cons to every kind of real estate investment properties. What works for one person might not work for another! This is why this series will be broken down into two parts, to make sure you find the right option for you.
Real Estate Investments Option 1: Investment Condos
Ever wonder who’s buying all the condos you see changing the GTA’s landscape? Investors. In fact, a study found that 40% of GTA condos are owned by investors. Here’s why:
The Pros
• A good investment condo will break even (or be cash-positive) with a 20% down payment (which you require for a mortgage anyway).
• Opportunity for both cash flow and appreciation in value over time
• The rental market is at an all-time low for vacancies, so finding a good tenant should be easy
• Generally, less maintenance/repair work than being the landlord of a house
• Unique condos in good locations have historically appreciated more than the stock market
The Cons
• Lots of obligations and little flexibility due to the Residential Tenancies Act.
• Works best as a long-term strategy
Investment Option 2: Income Properties
Income properties – houses that have self-contained apartments that are rented out – are HOT, HOT commodities in the GTA.
The Pros
Having a basement apartment that you can rent out just might make the difference between affording the home of your dreams and not. At current interest rates, $1,000 in rent can cover over $200,000 in mortgage!
• Historically, houses have appreciated faster than condos, so if you’re looking to make money when you sell, then an income property may be a safer bet.
• With a 20% down payment on a multi-residential house, you should be able to
break even (or ideally be cash positive)
The Cons
If you’re living in the other upstairs (or downstairs) apartment yourself, you’ll need to cope with the noises and smells of your tenant
• Landlord headaches: repairs, renovations, tenants that don’t pay their rent
• Having tenants in leases may make it harder to sell your home
• Complexities with the legalities of apartments
Are these options appealing to you, but you want to learn more? Next week we’ll dive into some other real estate investment options. There’s a wide variety of real estate investment options for you, and we will work hard to make sure we find the right match for you and your investment goals.
Thanks for reading today’s BLOG!!!
Brian Kondo
Sales Representative / Team Leader
The Brian Kondo Real Estate Team
Re/Max Hallmark First Group Realty Ltd.
905-683-7800 office
905-426-7484 direct
brian@briankondo.com
www.BrianKondo.com
www.BrianKondoTeam.com
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