Mississauga condos continue to be a great option for first-time home buyers, investors, couples or people who choose to live alone. With prices still below $500 a square foot in the downtown area, the market continues to favour buyers with prices increasing moderately year over year.
For anyone looking to sell a condo, the market dictates that on average condos in the City Centre (downtown Mississauga) area sell for 97% of asking price and within 39 days (Toronto Real Estate Board Stats for 1st quarter of 2015).
An interesting trend has emerged where those who sell their Mississauga condo move further out west; primary Oakville, Burlington or Milton. These three cities are not known for their high-rise condos, but rather seen as “great places to raise a family”.
If someone has decided to sell their condo and continue to live in Mississauga, chances are that they would have to settle for an older home. Since there is not much more new land to build on in Mississauga, options for newer homes are limited. The idea of buying an older home, scares a lot of condo owners as they are used to the worry-free lifestyle they enjoyed while living in a condo.
Moving east towards Etobicoke/Toronto, is great for those commuting to Toronto every day; however prices tend to rise sharply the closer you get to Toronto. Also, the Etobicoke/Toronto areas are subject to a double land transfer tax, which ends up costing the purchaser an additional 1% of the purchase price.
A third option is moving north, towards Brampton/Caledon. Many clients I talk to, do not consider Brampton as a viable option for a few reasons. The quality of schools, the high costs of auto insurance and poor overall upkeep of the city are amongst the reasons. Further north of Brampton, closer to Caledon does look more promising, however the longer commute does deter many from making the move.
Milton continues to be a popular choice for many home buyers looking for an affordable solution for a newer home. The commute can be a little far, ranging from 15-25min to Mississauga however homes in Milton tend to be around 20% less than similar homes in Mississauga.
Although at least a 30-40min drive to Mississauga; Burlington is an upcoming city in Canada. It does well as a city and attracts families for a number of reasons. It has great restaurants and boutiques and holds some great touristic attractions such as Sound of Music Festival, Art Gallery of Burlington, Spencer Smith Park & holds Canada’s Largest Rib Fest. The city offers 29 public elementary schools and 14 Roman Catholic Schools, 8 public high schools and 3 Catholic high schools.
Oakville has really become one of the best places to live in Canada. With new development going on, great schools and parks, Oakville continues to thrive and grow. The new Oakville hospital is creating a lot of buzz and seems to drive real estate prices up. Oakville borders with Mississauga and is a 10min-20min drive to Mississauga. This may be a reason why many who sell their Mississauga condo prefer to move to Oakville.
These cities out west have come a long way and seem to be very popular and growing in demand for today’s home buyers. Some cities offer more affordable real estate than others. If you are thinking of selling your condo please click here. If you would like to know more about Oakville’s upcoming neighbourhood go check out my new blog on Preserve Oakville.
Have questions? Need advice? Contact us. We can help. This entry was posted on
Tuesday, August 4th, 2015 and is filed
Great news folks! Today Pinnacle released their next condo project that will be located by Hurontario & Eglinton Ave W. Currently, Pinnacle has 2 towers, Crystal, at 55 Eglinton Ave W & 75 Eglinton Ave W. The 3rd and 4th proposed towers called “Amber” will be located behind the first two towers. Standing at 23 and 26 storeys, the 1 Bedrooms will start as low as $260,900 & the 2 Bedrooms as low as $340,900. After the success of Crystal, this new set of condos will retain the same interior finishes and have a similar exterior glass look. Just as Crystal, Amber aims to have one large lobby connecting the two towers. Pinnacle is also famous for their other project close to Square One Mall; Pinnacle Grand Park 1 & Pinnacle Grand Park 2.
Amber will be situated close to Highway 10 and Eglinton Ave W. Currently, there are 3 Plazas surrounding the project that offer a variety of services such as Service Ontario, Post Office at Shoppers Drug Mart, Florists, LCBO, Convenience Stores & Scotiabank. Restaurants such as Montanas, Harvey’s, Swiss Chalet & Cora’s are within walking distance. As well as, Starbucks, Tim Hortons, & Oceans fresh food market are also within reach.
Surrounded amongst green landscapes, broad sidewalks and wide streets, everything is within ones reach. Highway 403 is down the street and Square One Mall is a 5min drive. There are numerous schools such as Saint Pio Of Pietrelcina (French Immersion Grades 1-4) & St. Jude (French Immersion Grades 5-8), Barondale Public School (French Immersion), Cooksville Creek Public School, Saint Hilary Elementary School, Bristol Road Middle School, Saint Matthew Elementary School, Fairwind Senior Public School, San Lorenzo Ruiz Elementary School & St. Francis Xavier Secondary School nearby.
These two towers will mimic Crystal, in terms of design and amenities offered. Standing at 23 & 26 storeys and will offer over 400 units. The exterior looks modern, made out of glass. The podium will offer 2 storey townhomes (still not released) and will complete the exterior look. Once you walk inside Amber, the modern concierge desk & interiors with its high ceilings and sleek design will take your breath away.
Indoor Swimming Pool, Jacuzzi & Sauna
State Of The Art Gym & Yoga Room
His & Hers Change Rooms
Party Room Equipped With A Kitchen
2 Guest Rooms
Kid’s Play Area
Outdoor Patio With BBQs
Features & Finishes
Amber will offer designer finishes and numerous layouts catering to every individuals taste. From 9ft ceilings, to floor to ceiling windows, the suites are stunning and welcoming.
Laminate Flooring In Main Living Areas
Broadloom In Bedrooms
Porcelain/Ceramic Tiles In Kitchen & Bathrooms
Designer Spa Like Baths w/ Soaker Tubs & Rain Showers
Designer Chef’s Kitchens w/ Brand Name Stainless Steel Appliances
Underground Parking & Private Storage Lockers
Note: This project is still not open to the public. For VIP agent access please call: 647-989-7517
If you are a first time home-buyer or investor and are interested in viewing this project, please register with me here. As always, I will have VIP specials and exclusive offers for my clients that are registered with me. Please note that these offers are not valid or offered by the builder. Please remember that all units are on a first come, first serve basis. Therefore, make sure to register ASAP & to reserve the unit of your choice. This entry was posted on
Monday, June 8th, 2015 and is filed
Prices are still low – Mississauga pre-construction condos are often below $500 a square foot, which is much cheaper than other major cities. By default, pretty much all pre-construction condos sold today in Mississauga come with one locker and one parking spot. In places like Toronto, parking spots are often reserved for only 2 bedroom units and buyers have to pay upto $50,000 (or more!) to actually get a parking spot.
With each new building coming up, prices set by the builder tend to increase slightly. Buying early at the VIP stage ensures that you get the first pick of a unit at the lowest possible price.
The downtown core is still growing – The number of condos in towntown Mississauga has almost doubled in the last 12 years. Over the next decade we can see as much as fifteen additional condos within the Square One area getting constructed. With the expanding downtown Mississauga core we not only see more condos, but also more roads, transportation and places to entertain. The recent opening of the Bier Markt has created a lot of buzz online.
LRT – On April 21st 2015, the Ontario government approved the budget for the light rail transit system. This 23 kilometer LRT line will run on Hurontario and have 26 stops connecting Brampton, to Square One down south to Lakeshore. Some of the stops included around the Square One Mall, is Living Arts.
Property values are known to increase when public transportation is accessible.
Square One renovation – In 2013 Square One shopping centre announced a massive $380 million dollar renovation project. The mall would expand to include stores such as Simon’s and Holt Renfrew. You can track the Square One renovation progress and even watch it on live camera here.
Located within walking distance to many of the condos, the mega mall gave the condos in downtown Mississauga the name “Square One Condos”. With many people wishing to live close to large shopping centers; Square One will continue to have positive effect on real estate prices.
Interested in a pre-construction condo? Please read this article first if this is your first pre-built condo purchase.
We just launched the VIP event for Amacon’s Block Nine and soon will be presenting the info for Pinnacle’s Amber condos. Register with us now and get access before the general public. This entry was posted on
Monday, June 1st, 2015 and is filed
Exciting news today as the famous builder Amacon is once again presenting a brand new condo project in downtown Mississauga called “Block NINE“. The project is not open to public or real estate agents yet, however as always we have VIP access for our clients and we can book up to two units per person starting today. At the moment they are releasing the first (south tower) only.
Since this is a pre-release sale, all interested parties must contact us directly at 647-989-7517 and book an appointment to the sales center.
– There are one bedroom units ranging for 546 square feet up to two bedroom units with large terraces totaling over 1600 square feet
– The project is schedule to be completed in June 2018
– The deposit structure is flexible allowing the buyer to pay only 15% within 1 year and the final 5% on occupancy.
– There are two model units available to see (1 bedroom and 2 bedroom).
Please contact us directly and we will be to e-mail you all the prices and layouts and be able to set you up with a private viewing! This entry was posted on
Saturday, April 18th, 2015 and is filed
Over the years we have been blogging about Mississauga condos by mainly offering tips for buyers and sellers. This special blog is being dedicated to all condo property management companies in Mississauga. The purpose of this blog is to shine a different perspective on what Realtors and the public feel is the role of a condo property management company, and how to increase overall condo owner satisfaction within any given building.
As an active Realtor, I have seen it all; the good, the bad and the ugly when it comes to condos and the property management companies that run them.
The “good condos” are simple; the buildings are clean, the guidelines are strictly enforced, there are updates made in some of the older buildings, issues are addressed and fixed quickly.
The “bad condos” have a few problems, that can be fixed relatively easily. Minor things that need to be addressed, such as outdated gym equipment, burnt light bulbs and constant broken elevators. There may also be a need to change a contract for landscaping or the window cleaners, but generally speaking these condos still have hope.
The “ugly condos” are the ones that everyone tries to stay away from. These condos have a reputation which has been damaged during the years and it is very hard to restore confidence in these buildings. These buildings may have special assessments issued to some owners, which caused an increase in the condo fees. These condos may also show major signs of wear and tear even though they are only a few years old.
In this blog post, we will address four categories in which every single condo property management company should exam and look for ways to improve them. These include:
Security / Concierge
Its amazing what kind of an atmosphere a security company can create inside a condo building. Most square one condos do have security and it is up to the property management company to hire great concierge people.
The word “concierge” means service in french. Every person coming to the building should be treated the same, with a common courtesy. There is no need to be rude and unfriendly, it makes people not want to visit or live there. Need not to mention, the residents of that building pay for the salary of both the concierge and the property management company.
What is ironic is that real estate agents often get treated like criminals by the concierge in certain buildings, while showing the building to potential buyers. Buyers do take notice of rude security and it ultimately affects the likelihood of a potential sale for owners of the condo units.
There are some buildings that are two years old but look like they are twenty years old, while other buildings do not show that they age much. The upkeep of any condo building has a direct correlation on the values of the units within that building. To ensure good upkeep, the following should be considered:
– Routine patrols by security of entire premises at least every 24 hours.
– Making it easy for building residents to report problems.
– Ensuring building repairs don’t take a long time to get addressed.
As a side note to all property management companies, please ensure that the cleaners do not put the elevators in service to clean the condo during busy hours. Having one elevator in service during rush hour can be bad for residence.
Be Fair and Consistent
One of the best traits of a well run building is that the condo management is fair and consistent with every resident and visitor in the building. It might be tempting to sometimes grant a favor or exception for a resident however this may lead to greater dissatisfaction should another resident notice this.
Being fair and consistent also means that the property management is responsible for obtaining the best service contracts for that building. In the past, there have been cases that were reported to us, in which the condo management were negligent and got overpriced contracts, which in turn cost the residents money. In a more serious scenario, a condo management company was involved in fraud and used the money in the reserve fund in an inappropriate way.
A well run management company should be particularly concerned about the policies which are in place. Numerous times residents voiced their opinions that the policies and procedures within their building are either inefficient or ineffective. These may include:
– Forcing visitors to get parking passes even if they are staying for 15minutes
– Requiring residents to obtain certified deposits for moving in/out and deliveries
– Not having a suggestion box, that allows for feedback.
– Not having a designated, easy to find indoor spot for Realtor lockboxes.
– Security refusing parcels or keys on behalf of condo owners/tenants.
– Not allowing Realtor Photographers to take pictures of building amenities.
In conclusion, property management companies which constantly evaluate their own role in the condo building and the level of satisfaction they bring to residents of that building have a higher chance in succeeding in the long run. Websites such as mysquareonecondo allow residents of various condos to write positive or negative experiences in any particular building. This transparent process ensures that the condo property managements are ethical, consistent and always serving the best interest of the residents. This entry was posted on
Tuesday, April 7th, 2015 and is filed
If you want to rent a condo in Mississauga, you are required by many landlords to sign a one year lease with them. The one year lease is often seen as a good length of time for a landlord to commit to a tenant, and for a tenant to commit to a property. More than 50% of tenants end up staying for more than a year; sometimes for as long as 5 years. Read FAQ on condo rentals in Mississauga here.
Although there are no official definitions of short-term leases, for the purpose of this blog, I will define short term leases as any residential condominium rental for the period of one day to 90 days, or 3 months.
Why is there such a demand for short term condo rentals in Mississauga?
Unlike Muskoka or Miami, short term rentals in Mississauga are not primarily driven by tourism. Mississauga attracts a lot of short term rentals because of three main reasons:
1) Business – Compared to its sister city Toronto, Mississauga is very affordable and easier to commute in by car. Many business professionals come to Mississauga since it’s close to the airport and it’s the headquarters of many fortune 500 companies. Executives that stay in short term rentals, argue that they prefer condos over hotels. Living at times for a week in a hotel can be depressing and tiresome.
2) In between Condos – Another popular segment of the population who chooses to use short term rentals in Square One are those who are in between a purchase and a sale of a property. It happens that an owner of a condo sells his or her condo, and has to leave before they have a chance to move into their new place. In this scenario a short term condo rental looks like the perfect solution. He or she can move into the short term suite for a few weeks or so, while the rest of his or her stuff can stay in a locker.
3) Lack of modern hotels – This is a huge driving force behind the overwhelming demand for short term rentals. The fact remains that Novotel is the only hotel in downtown Mississauga. This hotel is over 30 years old and dated by today’s standards. Overcrowding and lack of choices of hotels for travelers forces travelers to stay in short terms rentals. Will another major Hotel be built in downtown Mississauga in the near future? I hope so.
Problems that arise with short-term rentals.
On the surface short term rentals can seem great as everyone seems to benefit from them (other than the hotel owners). However, at a closer look many problems seem to arise.
Owners of condo units in buildings that have short term rentals, argue that they are not happy when their condo building is run like a hotel. They claim that not only does it ruin someone’s unit, but it leaves wear and tear on the hallways – walls and carpets from the constant moving. Owners say that in order to fix the run down hallways their maintenance fees go up.
Larger problems arise when owners offer nightly rentals and people who rent these condos start to use them as “party suites”. In a recent extreme event, an owner of a condo in Tridel Ovation contacted me about how upset she was when a short term condo rental was leased for one night to some students. The email further explained that the party got out of control, to the point where a Pizza guy’s delivery car was stolen and cops were called in to investigate. Yikes!
It gets worse.
Condo buyers get often worried about short term rentals and what effect they might have on the value of units in their building. The good part is that, as far as we know Tridel Ovation and Skymark are the only two condos in Square One which legally allow short term rentals. What I mean by legally is that their condo bylaws don’t state otherwise. But, and there is a BIG But, that is not to say that owners in other buildings are not renting their unit out on a short term basis.
Just check out airbnb.com, a billion dollar company (yes Billion), just dedicated to short term rentals. Just at a quick glance, pretty much every single building in Mississauga has illegal short term rentals.
What can be done about short term-rentals?
In some buildings, such as 223 Webb Drive, an active role in “cracking down” on these short term rental suites has taken place. The property management got involved and shut many of these “operations” down.
Unfortunately, if you are an unhappy resident, who wants to take a proactive role in trying to eliminate the short term rentals you might have a lot of work ahead of you. Although it varies from building to building, typically it is up to the condo management on how they deal with short term rentals. Speaking to someone on the condo board should be your first step.
In buildings where short terms are legal and you wish to change that, it is almost next to impossible to do so as a single voice. This would require a change in the declaration and a very high % of unit owners to agree to this change. Since many of the owners in these buildings are already renting their unit out for short term, it will be difficult to get them on board.
How do you feel about short term rentals? Please feel free to share your thoughts below. This entry was posted on
Monday, February 9th, 2015 and is filed
It always seems especially at the beginning of any given year people are curious to know how the real estate market has done in the previous year, and what experts are predicting will happen in the future. Over the years I have published many blogs, giving my insight on this topic.
How did the Mississauga Condo Market do in 2014?
No condo market crash.
Many of the media and newspapers who were calling for a major condo market price correction are puzzeled and don’t understand why the condo prices have not fallen. 3 reasons – a) Low interest rates (Under 3% for a 5 year locked period) b) Strong immigration population (nearly 100,000 new immigrants come to the Greater Toronto Area every year) and c) Detached Homes are unaffordable for many (average price in November 2014 for a detached house in Mississauga was $672,000 and in Toronto it was a whopping $935,000!)
Pre-construction condo sales have slowed down.
No condo builders have launched any new projects in 2014 in downtown Mississauga. This trend was prevalent not only in Mississauga, but the rest of the GTA. Since many investors only buy pre-built condominiums in the first stages before the construction starts, most of the pre-construction sales this year consisted of end users. This group included first time home buyers, downsizers and people moving from abroad.
Rent Prices Went Up.
Many tenants were in for a nasty surprise when they found out how much prices have gone up. To put this into perspective, 3 years ago it was possible to get a newer one bedroom + den condo, near Square One for $1300. This year you were lucky to get the same unit for $1450. That’s like a 4% increase a year!
How will the Mississauga Condo Market do in 2015?
New condo projects.
Amacon (builders of PSV and Residence) are set to release a new condo project this spring in the Park Side Village area near Square One. Pinnacle (Builders of Grand Park and Pinnacle Uptown)are also aiming to release a new block in the Pinnacle Uptown community of condos. These projects have been anticipated by investors given the success of their previous towers. As always we will have Platinum access to both projects and we are encouraging people to start registering even now.
Non-renovated units might be a hard sell.
Buyer expectations are up. Stainless steel and laminate floors are perceived to be the standard by many condo shoppers in 2015. If you are thinking of selling your condo, and your unit is more than 6 years old, my guess is that it needs a face lift. Contact us and we will be able to advise you on what specific things need to be addressed before we put it up for sale.
Good units will increase in value and bad units will not.
Buyers are surprised to find out how much prices can vary for similar units from building to building. Over the years certain condo buildings have increased in value more than others. Many dynamics come into play when deciding that value, such as: reputation of the condo building (which I believe is most important), number of renters vs owners in the building, the quality of the property management, the building materials etc. (We will cover more on this in a future blog post – stay tuned.)
If you are renting and can afford to buy – do it. Rent prices in 2014 have broken new records and are expected still to increase in 2015. Stop paying your landlord’s mortgage!
When looking at properties for sale, make sure to work with a condo expert. The condo Realtor will be able to source you the best possible units, and do it free of charge (as he gets paid by the seller).
Finally when selling a condo in 2015, you should really know that marketing matters. With over 450+ condo units for sale around Square One at any given time, it is important to make sure that your condo stands out from the rest.
Wishing all readers nothing but the best for 2015! This entry was posted on
Saturday, January 3rd, 2015 and is filed
It’s no secret that real estate prices in Canada. have been going up for a decade strong now. Unlike our U.S. counterparts, the Canadian real estate prices seemed almost immune to the 2008 global recession. Some places have gone up so much that for many people buying real estate is no longer an option.
Are you interested to know how Mississauga real estate competes on a global level in terms for pricing?
The first thing you must know is that the value of condos is calculated on a “per square foot” or “PSF” basis. The higher the PSF, the more expensive the unit will be. Most PSF calculations measure the internal square foot size of the unit only (no balcony), and may or may not take into account a locker or parking spot.
To put this into perspective, pre-construction condos in Mississauga sell on average for about $425 (+$25/-$25) per square foot. This means, that a 625 square foot, one bedroom condo goes for about $265,000. This usually includes a locker and a parking spot, but does not take into account such things as floor premiums or upgrades, which can drive the price of the unit up.
Let’s see how the $425+ per square foot price in Mississauga compares to different condo prices around the world.
Toronto – $600+ PSF – Toronto is the closest mega city to Mississauga, and Canada’s largest municipality. Condos in Toronto sell for about 30% more than they do in Mississauga. Toronto is the second largest city with skyscrapers in North America, after New York City. Also most calculations for PSF in Toronto do not take into account parking spots and lockers.
New York – $1,500+ PSF – The beautiful skyline of Manhattan in New York has one of the most expensive real estate markets in the US. With traffic 15 hours a day, lots of condos sell with no parking spots as people resort to taking the subway or taxi everywhere.
Hong Kong – $1,500+ PSF – Hong Kong is much crowed and home to some of the smallest real estate properties in the world. Tiny condos, that are sometimes less than 250 square feet in total size sell for big $$$.
London – $2,500+ PSF – In London condo apartments are known as “flats” and are the most expensive in the world. A downtown London condo which is only 500 square feet can sell for as much as 1.2 Million Canadian dollars! Think Mississauga real estate is expensive? Think again! This entry was posted on
Tuesday, December 2nd, 2014 and is filed
Your Condo Is Not THAT Special
Most sellers insist that their condo is special and deserves a higher list price than other comparable properties. Sometimes this justification of a higher price is made because of upgrades, other times it’s because the seller is misinformed or just unrealistic.
We have to keep in mind that some upgrades are not to everyone’s taste; such as floor colors or cabinet colors. Remember that 90% of condos sell within 2% of asking price and therefore, it is important to price your condo right the first time you put it on the market. Overpriced listings quickly become stale listings and buyers lose interest quickly.
Pro tip: Typically speaking, when selling a unit, an owner can expect to recover only 40%-60% of the value of any given upgrade.
Sellable vs. Livable
Many properties that are on the market are either owner occupied or vacant, and it is hard to keep it in a very clean condition. However, some things are a bare minimum requirement when choosing to place your condo for sale.
– Depersonalize your property by putting away personal items in boxes or drawers, since the rule of thumb is; less is more. If you have a vacant property, it is strongly suggested that you ask your agent for staging services. By investing sometimes $2,000 in staging services; your property will not only stand out from others on the market, it has proven to sell faster and for more money than you are listed for.
– Painting & minor repair work: Paint your unit white or beige if you have colorful walls. If you have a leaky faucet, you should get a plumber to look at it. Buyers are very picky and notice things like leaky faucets and burned out light bulbs.
– Tenants: Selling a property with tenants can impose its own challenges. We understand that sellers do want the mortgage expenses covered while the property is listed, however they must also understand that tenants often do not want the property to sell. This can result in the seller getting less money than expected for their property.
– Pets: Sellers need to know that selling a property with a pet can be difficult. Some buyers are absolutely scared of your pet and others have allergies or sensitivities to the odor of pets. When your property is listed, it is best to leave your pet with family members for the duration of the selling process or to take the pet out with you while your property is being shown to potential buyers.
Your Agent Matters
Despite the belief of many, the agent you select can have a profound effect on how fast your listing sells and at what price. The most common mistake that sellers make is that they choose their agent based on convenience rather than practicality. Meaning, sellers often select an agent who is a family member or a friend, rather than the agent who is the most capable of doing the job. Based on our experience, many clients end up in an uneasy situation with a realtor who is their family member or a friend after that agent fails to sell the property.
There is a huge benefit to choosing an agent who is an expert in a certain area, and many sellers completely underestimate the value of having a local expert agent help them sell their home. Not only does the local expert know the market, he or she knows similar properties, may have sold previous properties similar to yours, therefore knowing the expectations of buyers, as well, the local expert knows many agents with buyers and what they’re clients are looking for. This can only help the value of your property and the time it takes for your property to sell.
Pro tip: Before you hire an agent that is a family member or a friend ask yourself this simple question “Will I be able to fire my friend or family member if they can’t sell my property?” And keep in mind what this will do to your relationship.
We understand that some sellers feel obligated to list with their friend or family member; however there may be consequences if they decide to go that route.
For many sellers these 3 points are sobering truths which they need to hear. Since selling your home is the biggest financial decision most people make, it’s important to be well informed and understand the pitfalls that come with making bad decisions. Poor choices can not only cost thousands of dollars but also potentially ruin great relationships.
If you are interested in how we sell condos in Mississauga click here This entry was posted on
Friday, November 14th, 2014 and is filed
Perhaps, the number one question asked by any investor looking to purchase a condo in Misisssauga for investment is whether they should buy a one bedroom or a two bedroom condo. Although both have their advantages and disadvantages it’s important that the buyer is aware of all the pros and the cons that come with each choice. In this blog post, we will examine how a one bedroom vs. a two bedroom apartment purchase, affects the bottom line of any investor.
Capital appreciation is the price appreciation each condo owner gets simply by owning a condo over a period of time. With real estate prices in Mississauga universally going up by a 2-5% year over year, the idea of leveraging a small downpayment, against a large purchase price is attractive to investors. To put into perspective; if a one bedroom condo which sells for $275,000 goes up in price by 10% over a four year period, the owner made $27,000 in appreciation. On the other hand, if a two bedroom unit which sells for $350,000 goes up by 10% in the same four years, the unit has appreciated by $35,000.
Two bedrooms appear to be the better choice over one bedrooms, when looking at the appreciation rate.
Future Resale Value
The resale value of any real estate property is differently affected by the supply and demand forces. A few trends happening now in the market are worth noting:
– Unit sizes for newer pre-construction condos are up to 10% smaller from what they were a few years back.
– Families are having less kids than previous generations, and therefore opting out of the house life and opting to live in a condo.
– House prices are at an all time high and unaffordable for many. People who didn’t consider to live in a condo before are now adjusting their expectations and choosing the condo life.
Based on the above statements, it appears that two bedroom condos will be more in demand in the near future.
The idea of having an empty unit sit on the market for a long period of time while trying to find a suitable tenant, frightens any investor. Since rent prices have been going up faster than most incomes, tenants are often surprised to find out that they cannot afford a two bedroom condo.
As a general rule, the cheaper the rent, the more people the condo will appeal to, the easier is it to lease out the condo. For this reason, one bedrooms typically do rent out faster than two bedrooms.
It is important to note that one bedrooms tend to lease out to singles, or young professional couples with no kids. Two bedrooms on the other hand, are more attractive to small families or those making a good income and requiring the second bedroom to be used as an office or guest suite.
When looking at investing in real estate, or any investment for that matter, risk always comes into question. Even though real estate is seen by many as a 100% safe or “risk-free investment”, I would caution to use such terms. As with any investment, real estate does present its own risks.
Having said that, Canadian real estate is regarded as a safe tangible asset, which serves as a hedge against inflation. Meaning, even if real estate prices only appreciate 1-3% per year, it is often enough to counter the amount lost in inflation if the same money was sitting in the bank.
How does risk play a role in deciding between a one bedroom and a two bedroom condo? Simply put, the more expensive the property the higher the risk on the individual. Having a two bedroom condo sit vacant for a month costs any landlord more than if it was a one bedroom. For this very reason, I encourage all first time buyers or investors who are tight on funds, to probably look at one bedroom units over two bedroom units.
Return on investment (known as R.O.I.) refers to not only how fast you get your initial investment back, but also the amount of time and resources required from you for the investment to be worth it.
Having the privilege to work with many investment properties, I can say with certainty that there is no straight answer to whether one bedroom or two bedroom condos have the better R.O.I.
What I could say is that one bedroom condos tend to have better monthly cash-flow than two bedrooms. On the other hand, two bedrooms often get more stable tenants who are looking for a longer term lease.
There are many dynamics which come into play when investing in real estate. A savvy investor should do his homework and decide which route is best to go for.
Although my personal real estate investments have always involved two bedroom condos, it is still possible to make a good investment buying a one bedroom.
Having a knowledgeable agent on your side, to source out the good potential investment properties should be your first step. If you are contemplating buying an investment condo and if you are currently not working with an agent who knows Mississauga very well, give us a call and we would love to help you. This entry was posted on
Sunday, October 26th, 2014 and is filed