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Is a Condo a Good Investment Now?
Not too many years ago, buying a condo was considered a compromise move. Condos are more affordable, particularly for first-time buyers who have a tough time breaking into the housing market. Until recently the cheap entry fee entitled you to apartment-style living, no yard to call your own and lusterless appreciation—not an attractive package to most home buyers.
This may be changing. Latest statistics from Canadian Mortgage and Housing Corporation (CMHC) show condos make sense for investment or ownership. Rentals are up 30% over last year according to the Toronto Real Estate Board's analysis of the last quarter of 2008 vs 2007.
New construction favouring condos
Hi-rise sales stable
Is a condo a good investment?
The condo situation looks promising. The percentage of total sales is expected to continue rising from 25% of all sales in 2000 to 60% this year. Condos are selling well and renting well, making them a good investment whether you're planning on moving in or leasing out.
Condo buying tips:
Find out what the condo fees are and what is covered by this fee and include it in your costing. Some condos prohibit pets. And some have parking, storage and renting restrictions. Read and understand the Covenants, Conditions and Restrictions (CC&Rs) and any other pertinent governing documents before you complete a purchase.
What are the tax, legal, and financing considerations?
In addition, you would be entitled to deduct a part of the car-related expenses involved in managing your investment portfolio, whether it is one rental property or more than one. The percentage of all your car-related expenses can vary, obviously depending on the usage of the car relating to your investment.
If you are seriously contemplating investing in a condominium, it is important to consult your real estate agent and seek the advice of a competent tax and accounting professional, and legal advice from a lawyer specializing in condominium law.
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