In this video we'll look at condos as an investment.
Should you buy as an investment?
Pros and cons and what are some strategies when investing.
That's starting right now.
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So today I'm joined by Karen McDonald, community manager with Brookfield Residential.
And the question we're gonna answer is, are condos a good investment?
So I know we talked about buying a condo for you to live in but are condos a
good like real estate purchase, for investment?
Of course yes they are and in fact
they're probably the most common that people buy for investment as well too
because they cater to people that are that are renters. That are looking for a certain budget amount to spend
on their rent on a monthly basis and condos fit the bill for that. So yes they're an excellent investment.
I think as an investor what you need to consider is the amount of time you want to own that property.
Real estate is always best as a long-term investment, so if you're thinking of buying and selling within a
year or two, you're probably not going to make a huge amount of money
depending on the market that you're in. You need to factor in how long you want
to keep that property. Whether you can cover your costs in that property for
your rent as well too. And really knowing that reasonably 3 to 5 percent in a good
market is what you're gonna make on a yearly basis. So think long term but
they're perfect for investment. So what kind of research should you do
which is I guess a little bit different than actually researching to buy, when
you're actually buying a condo as an investment? Yeah as an investment it's a
it's a lot more of the practicalities of things right. So when
you're looking at a property as an investor you're probably not going to
put all the things that you would want personally in that home because you need
to keep costs low, make it appealing enough for your renters to want to rent
from you, but still making it so that it's practical for you on a monthly
basis, that you're not expending too much over and above what you're asking for
your rent. So would like obviously you'd probably want some sort of target renter
that you'd want right so you know, between the person who maybe wants to be
close to work or and I know we talked about like living in a condo in
terms of getting to know your neighbors, that also has to factor in thinking what
type of person you want renting your condo? Yes absolutely
and I think it's depending on where you are number one location where you're
looking, but who's who's buying in that building
as well too? You know, who, what kind of, if you're in a community, do they have
family that lives close that might be something that people want as well. It
might even determine whether you buy a townhome or a condo because if you're
wanting families, if you want young families or young couples to buy, you're
probably more in a larger condo or a townhome, compared to something like
if you if you want to you know rent out to somebody that is just wanting to be
close to family and they just want to start them out of space just a single
senior something like that's very quiet apartment style is a little bit
better for that. But absolutely who you want to rent out the home to. What's the
demographic? If you're if you're close to universities, you're
gonna be university students. You know you're gonna have that. It's going to be
a roommate kind of situation. Or if you want somebody that just has you know two
income, no kids, you don't want anything on the walls or anything like that with
kids then, that's probably something you have to factor in too, larger condo/townhome.
But I guess that's also it also depends when you talked about the university
students right what's the turnover rate?
oh I think it's probably pretty high. For that I mean you're
looking at they're in for three or four years maybe within that their roommates
change you know, relationships change maybe they're you know, they get into
something, they want to move in with their partners, whatever that is. And so I
I guess that's something high turnover in rent. Or they graduate. Or they move away.
So I think it's talking, interviewing your your possible tenants is it's just
like anything else you need to know what their plan is as well too and aside from
walking them into a five-year at lease, probably not. In terms of leases, is
there set at least like one year two years three year like does it matter?
Yeah always and your landlord will determine that as well.
You can set the terms as a landlord. I mean looking when people are looking up
rents they typically look at whether it's a one-year two-year lease anyways.
And they'll already determine whether they want to you know contact you based
on what you put in your ad. Which is a better investment a new condo or resale?
I would think it would be new but new and resale depends on location
right. So if you want something inner city then location is where you're
gonna buy it's gonna cost you a little bit more. New for an investor, I think you
have some protections as far as warranties go. So that's always something
that you want to take into consideration, warranties. A lot of the times
Albertina warranty can be up to ten years for your apartment/condo. And so as
just as an investor from a you know cost standpoint, that'll save you some money
if any issues go wrong as well too. I mean there's there's benefits to
both location being the main one and resale warranties being the main one in new.
Great! So the question of the day I have for you, is did you buy a condo as an
investment and why? And did it provide a good return? Let us know in the comment
section below and if you want to know more about buying a condo,
check out our condo buying playlist here as well as other home buying videos here.
And don't forget to subscribe to keep learning from the experts we'll catch you in our next video