Why buy a condominium instead of house for a real estate investment?

Investing in real estate is considered to be by many to be a wise decision. But there are so many options out there to consider. REIT’s, commercial, retail store with office/residential upstairs, a house either single family, duplex, triplex, multiplex, buying land, condominium office, a residential condominium and the list goes on.

In this week’s blog we will compare investing in a residential condominium as opposed to buying a house for a real estate investment.

So, you are thinking about becoming a real estate investor in Toronto? Normally, a new investor is beginning their first investment with a smaller budget of capital. Therefore, you will probably have one of two options, houses or residential condominiums. While both options have their benefits this week, I will discuss the benefits of investing in a residential condominium.

The biggest benefit of investing in residential condominiums is that they are relatively inexpensive. The average price of a condominium in Toronto is $342,212 (TREB). Toronto homes on average are selling for $479,095. So the difference between owning a house or a condominium is $136,000.  The bank will require 30% to 35% down payment on your investment property.  Putting 30% down on the average price equals spending an extra $41,000 on a house. Investing in a condominium will leave more money in your pocket.  Now who doesn’t like more money?

An additional benefit of investing in condominiums is they are generally newer.  New condominiums are condominiums that have been built within the last 5 years while old condominiums have usually been built within the last 15 years.  In comparison old houses can range from 30 – 110 years old.  As properties get older they wear down. Condominium maintenance fees look after this for you. Home owners on the other hand are entirely responsible for all maintenance of their properties.  For example you may find out that the foundation on your property is not level. To fix this will cost many thousands of dollars.

In summary, condominiums are less expensive than houses. You will save money on down payment and the maintenance of your investment. The fewer expenses the more profit to be made. People invest in real estate to make money not to lose money.

This is only a brief summary of some of the advantages of condominium investment in Toronto.  Visit my website at mytorontocondos.ca  for more information.