If you want to invest in a condo, there are seven factors that you need to consider to maximize the income potential of your real estate investment.
Condo living is the new standard in today’s modern society. The accessibility to central business districts and the amenities at your disposal combine to offer value for your investment. But, if you are buying a condo for investment purposes, it might slightly change your perspective and approach to the whole buying process. Is it truly a worthy investment?
The Rise of Condos for Sale in Canada
If you would like to know which neighborhoods are the best places to invest in a condo, you can read more to find out about your options. The fact that there are also many neighborhoods and condo developments means that now is the best time to invest because you can have access to competitive pricing. In particular, pre-constructed condos are the norm these days so you can enjoy a condo unit in the future for today’s price.
Some of the best areas or neighborhoods near Toronto to buy condos from include Vaughan, Toronto, Mississauga, and Etobicoke, to name a few.
What to Consider Before Investing in a Condo
A condo is a good investment because they are typically situated in a strategic location. The amenities are also one of the biggest draws that make investors jump at the opportunity. If you are still weighing your options, there are a few factors that you need to consider before you make that investment.
#1 Location, Location, Location!
One of the primary reasons why investors buy a condo instead of a house and lot is its accessibility. Indeed, condos are built on prime locations. Some of the best examples are those close to central business districts and establishments like schools, malls, and hospitals.
Whether you are looking to invest in a condo that is close to workplaces or schools, it is a good investment because you can attract potential tenants. This is easily one of the main advantages that condos have over a typical house and lot since you can get close to urban areas for less than the cost of the latter.
#2 Cost of the Unit
The cost of investing in a condo is another important factor to consider it is one of the primary factors to look into. Depending on your financial situation, you can purchase a condo unit in cash or via a bank loan.
Either way, you have to consider your overall income and other expenses. You can determine if you can afford the down payment and the monthly amortization on the condo unit. But when it comes to buying a condo, you should look beyond the upfront cost of the unit.
There are also several other things that you have to think about such as HOA fees. The latter is commonplace in condos because they are used for the maintenance of the amenities and facilities within the building.
#3 Target Market and Income Potential
If you are buying a condo purely for investment purposes, you need to look at your target market. Are you targeting students or young professionals as prospective tenants for your condo unit? You need to find a condominium development that is close to either schools or the central business district.
That way, you can market your rental unit to those who work or go to school within the specific neighborhood in which your condo is located. Depending on where your condo is located, it can also impact your investment’s income potential.
The cost of rental for a condo unit will vary based on certain locations. You need to take that into account when deciding on your investment. In particular, you can research the average monthly rental income for other units in the same area.
#4 Amenities and Technology
When choosing a condo unit to invest in, make sure to take a look at amenities first. The amenities and facilities that potential tenants can gain access to is part of the selling point for your unit. Make sure you have access to basic facilities such as parking, laundry room, and security personnel.
But it is also important that you have access to lifestyle amenities such as a gym or fitness center, business center, and swimming pool, among other things. A good balance of functional and entertainment facilities can help your prospective tenants realize the promise of condo living.
It is also important to look at the technological features available in your condo. The real estate industry has come a long way and potential investors are looking at advanced technological features such as smart home systems and advanced security systems. Nowadays, CCTV systems and smart lock systems are not only a norm, but are highly expected.
#5 Know the Community
The type of community that the condo is built in is an essential factor to consider when investing. Is it a condo designed for young professionals? Or is it catered towards families and retirees?
Every condominium development will differ in terms of what their target market is so you have to choose accordingly. This will enable you to find the ideal setting, living arrangement, and amenities that will match the needs of your target market.
#6 Appreciation Value
In general, condos appreciate at a slower rate than house and lot properties. But, if you are willing to target those who live in the urban areas, this investment could pay off. This is true as long as you keep the vacancy rate low.
The good thing with buying a condo is that while the appreciation value might not be as high as other real estate investments, it is also the easiest to sell.
If you want to sell your investment in the future, you can manage it quite easily. It is, therefore, suitable for those who are looking to flip properties (versus those looking for long-term rental income).
#7 HOA Rules and Regulations
If you are investing in a condo to make it available for rent, you need to brush up on the rules and regulations. These are imposed by the homeowner’s association.
Most condo HOAs are quite strict about implementing these rules and regulations. As a rental owner, it is your responsibility to make this known to your tenants so you abide by those rules.
Make the Decision Now!
Are you interested in investing in a condo? What are other factors did you consider before deciding?