Deciding where and how to put down roots can be complicated enough, then add to that decision the options of renting, buying a condo, or investing in a house. Many real estate beginners opt for the condo option when a Detached or even a Semi-Detached home is simply out of reach. With Toronto’s Real Estate Market in the shape that it’s in today, more and more buyers are priced out of the market. But sometimes a condo is the wrong choice.
Are you a single, 20-something, in no rush to put down roots buyer? Are you a young couple, eager to buy now and settle in, possibly earning a bit on your investment till kids enter the square footage equation? Or are you a family, kids in tow, feeling squeezed out of the housing market? Here’s what you need to know:
For the Family
A condo is rarely a good place for a family to start their journey into home ownership. If you’re a family that is priced out of the housing market, there is so little chance that you will find a condo apartment that will have sufficient square footage for your needs at a lower price than a townhouse or a semi-detached home. Families, like the children that complete them, grow at a much faster rate than the condo market appreciates. This is not the place for you to invest your dollars. Instead, consider a condo townhouse; they still carry monthly fees (and the benefits of having those amenities), but they provide you with more space and a market that is equivalent to the housing market with a smaller mortgage price tag. If you want to get into a freehold house in the near future, you need to invest in a ‘like-market’; in other words – don’t buy oranges if you want to have apples.
For the Young Couple
A young couple with a double income and less expenses than a family would be more suited for a condo. So you’ve decided to take the plunge, stop renting, and do what you can to enter a housing market that you can afford right now. However, depending on where you are financially, you may be deciding between a pre-sale condo and a re-sale condo. In the case of a young couple who is either newly married or planning to be, pre-sale condos are not the ideal route. You want to get in, start building your equity, and make real-time decisions about your current situation. While the condo market does grow steadily, it does not grow anywhere near the rate of the freehold housing market and so your entry into it should be relatively cheap and painless. There is no shortage of condos in Toronto!
For the Single, 20-Something
You are the golden child of the pre-sale condo market. Maybe you’re coming from your family home or maybe you’re realizing that paying rent is essentially lighting your dollars on fire. Either way, you have the luxury of time and the small, upfront costs that come with it. You can take advantage of low prices, small deposits, builder incentives such as low mortgage rates etc, and the time it takes to build the space during which you can save up for a bigger down payment. Plus, your condo will increase steadily, even if not at a tremendous rate, and you will build equity instead of your landlord’s bank account. Then, when the time is right, you will have significantly more buying power to get into the housing market than your renting counterparts.
Whether you’re the first, second, or third on this list – real estate is not always as out-of-reach as it may seem. Families should expand their housing search or consider condo townhomes, young couples can grow equity in a re-sale condo while they save for the future, and single professionals can take their time, hunt around, then get their feet wet while they build their future.