Buying a condo to add to your real estate portfolio can be an extremely good idea. As condos tend to be located in cities, they are generally in a very favourable location, making them an ideal choice for first time landlords who want to see a real rental return on their investment. But if you have never purchased a condo before, you may not be aware of what to look for. Keep reading for a few tips that apply to all condo buyers, whether you are looking for a condo in Montreal, Vancouver, or Toronto.
Research the Market
If this is your first time buying a condo, you don’t want to simply jump at the first one you find. Instead, take the time to research the market to find out whether condo prices in a certain area are high or low at the current time, and whether this will be changing any time in the immediate future. You might also want to look into new condo developments – whilst these might still be in the process of building, you can often find cheaper prices by signing up for a condo in advance.
Choose the Right Area
The area that your condo is in will determine the rental price that you can choose. For example, a condo in the downtown area of Montreal will attract more renters and a higher rental price than one on the edge of the suburbs. Also take a look at the different neighbourhoods, these all differ depending on the city that you are in. Examine how close your condo is to public transport, schools, and other vital amenities. All of these will go some way to determining what you can charge.
Do the Maths
You want to look for a condo that will offer a good long term investment, so do the maths before signing on the dotted line. Aim for the rent to cover 125% of the mortgage, so that the rental fee will cover your mortgage repayments, any condo association fees, and net you a monthly profit. This is the only way you will be able to get a good return on your investment, both short term and long.
Consider New vs Old
Depending on where you choose to buy, you should be faced with a choice of buying a newly built condo, or one that is older. It’s important to consider the implications of this long term. A newly built condo is likely to be more energy efficient, thus saving your future tenants money on bills, and it will possibly also mean you won’t have to do any maintenance. An older condo will likely be cheaper to buy, but you may have more issues regarding maintenance and repairs. Newer condos are also likely to attract more renters.
Buying a condo can be a very exciting time, but it’s important to take the above things into consideration before signing on the dotted line. Don’t rush into a decision that you may end up regretting.