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
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
Will parent-investors become the new type of condo investors?
Over the past year we have seen more and more parents buying condos for their kids to enjoy in the future. The most common purchase is a pre-construction one bedroom/ one bedroom plus den condo, which typically goes for about $270,000-290,000 depending on the size, floor and layout.
What makes the parent investor different from your traditional condo investor, is that they are in it for the long term. Typically this means anywhere from 5-10 years.
When the parents initially purchase these pre-construction condos, the kids are sometimes as young as 14-16 years. Once the pre-construction condos are ready, parents hope to rent them out for a few years, and have their kids move in once they have finished school and land a good job.
If the parents, for whatever reason, decide that the kids should not move in, then they can continue to rent out the condo (so that it pays itself off), or sell it for an anticipated profit. Parents see this as a “win-win” situation.
It’s no surprise that this trend is taking place. If parents want to invest in their kids’ future, real estate is the clear choice for many. “Banks pay interest which is less than inflation, and stocks are too risky” -according to many parents. Investing in real estate, especially in a growing city like Mississauga, provides the stability many cautious investors are looking for. In addition, buying a property at the pre-construction condo stage, allows parents to “lock-in” the price at the time of purchase.
Typically pre-construction condos require a down payment of 15% in the first year and 5% when the condo is finished. However, having VIP status with many of the condo builders, we are able to give our purchasers special stretched deposits which sometimes require as little as 10% in the first year and the final 10% when the condo is ready in 3 years or so.
There is no requirement for mortgage approvals, or credit checks until the condo is ready. This makes the process of buying a pre-construction condo seamless. With the help of a VIP agent (like us) , clients can book an appointment through us to see the sales centre, be educated about what to look out for and in one afternoon become condo owners. It’s as simple as that.
If you’re a parent who wants to help your kid get a “foot-in-the-door” into real estate, I would love to hear from you! Remember, my buying services are 100% free to you, as I get compensated by the builders directly.
This entry was posted on
Friday, September 5th, 2014 and is filed
“My Square One Condo” has an entire rental team dedicated exclusively to working with rentals in the Square One area. We continuously aid tenants looking to secure properties, as well as landlords looking to lease out their properties. Over the last few months I started monitoring rental properties closely and how they ended up getting leased out. I decided to publish a short blog based on these observations.
5 cool facts about Square One condo rentals
– The most common request from a tenant is for us to find them a “clean unit with an open concept layout”
– About 75% of potential tenants ask if the hydro is included
– There is a strong demand for short term furnished rentals, however we do not service short term rentals (investors take note *Hint Hint*)
– It’s not uncommon for a landlord to receive 2-3 offers on his lease within the first few days of marketing the property online.
What does this mean for tenants?
If you have been holding off from buying and waiting for the market to crash, you probably have been wondering why the market hasn’t crashed yet? The truth is, it has not happened and it looks like it isn’t going to happen anytime soon. There is enough demand in the rental market, and vacancy rates are at historical lows (less than 1% in region of Peel).
Existing tenants do not be alarmed if during your renewal period of your lease, your landlord decides to increase your rent. Back in 2008, the starting price for a newer 1 bedroom condo rental in the Square One area was between $1200-1250, five years later the same property could rent out for around $200 more per month.
At this point you should seriously weigh out your options. Consider how much money you have spent on renting over the last five years. Decide if you can see yourself living in Mississauga for the next 2-3 years. If so, buying a condo, as opposed to renting one, might just be the right move.
What does this mean for landlords / investors?
You are in a good position. If you have purchased a pre-construction condo which has been recently completed, such as Limelight or The Residence, you should have no problems finding a tenant. Price the condo correctly and get your agent to market it online.
For those considering getting into condo investing, through renting their condo out, the time could not be better. Since condo sales in the City Centre area are slightly down (based on volume NOT price), you can get lucky and score yourself a great deal on a unit. Make sure your agent not only understands the condo resale market, but also the rental market, as their skills will be required to lease out your unit.
Tired of renting and paying your landlord’s mortgage off? Interested in getting an investment property and leasing it out? Either way, contact me, I would love to help.
This entry was posted on
Friday, August 23rd, 2013 and is filed
This is something that I have wondered for a very long time, but not until recently have I decided to dig a little deeper, in order to find out. By my definition, a “bachelor pad” or “studio” is any condo which is less than 499 square feet and which does not have a dedicated bedroom. Interestingly enough, in Toronto there are many condos which are less than 499 square feet that have a separate bedroom, making them not count under my definition. However, here in Mississauga, we are still fortunate enough to have condos relatively decent in size as compared to other cities such as Tokyo and New York.
– Currently Daniel’s is the only builder in the Mississauga area, who has recently built studio condos, and there are no pre-construction studio condos planned for the near future
– Over the past 20 months only four studios have sold in Mississauga
– The most expensive studio ever sold in Mississauga was under $200,000
As Compared to Toronto
– Most of the newer condo projects offer studios
– In the first 7 months of this year alone over 25 studios have sold in Toronto
– During this time, the average selling price was almost $225,000
The statistics seem to speak for itself. In Mississauga, at any given time there are very few available bachelor units for sale and even less of them actually end up selling. It’s to no surprise that condo developers are shying away from building more studios in Mississauga. On the other hand, as the data shows, studios do seem to work very well in Toronto. This phenomena can be explained through various ways including, the higher cost of living in Toronto, the available transportation systems and of course the vast demographics.
However, keep in mind that with the rising condo prices in Mississauga, developers are making units smaller as compared to a few years back, and with the expansion of new transportation systems (such as the LRT) studios could one day become more mainstream. Until then, I believe that condo buyers can save their money and buy a one bedroom condo and make a greater investment.
This entry was posted on
Friday, July 19th, 2013 and is filed
Over the past eight years or so, many pre-constriction condos in Mississauga served as great investment tools for investors. As previously mentioned on this blog, I personally know clients who made $30k, $40k or even $50,000 on a single condo investment venture. Many of these clients have bought and sold several condos and each time they have managed to come out with substantial profits.
However, this is not to say that all condo projects are great investments. To illustrate this, I decided to use a real life case study to show how one person managed to come out financially negative when trying to sell their condo investment. For privacy reasons, the person’s name and the builder’s name are not disclosed in this post. I hope this case study will help some first-time home buyers and first time condo investors overcome some of the biggest mistakes made by amateurs.
The Case Study
Last week I met with a client who was interested in selling her pre-construction condo which she took possession of less than a year ago. Her initial plan was to buy a pre-construction condo, live in it for a year, sell it and then move out east to a smaller town in Ontario. Her search for a condo started in late 2010, when she began looking for a condo by herself, without the assistance of a Realtor. The clients’ requirements were as follows:
1) Pre-construction condo near downtown Mississauga
2) Two bedroom
3) A condo which is close to being complete
After driving around Mississauga on a Saturday afternoon, and seeing numerous signs for various projects, she “popped into” one of the condo presentation centers. This particular condo project was already complete and the builder was selling the “remainder” of the inventory.
The client was very excited and took home all the various price sheets and floor plans offered by the builder to look over. After about three days she decided to visit the presentation center to finalize her purchase. She refused the help of any Realtor and it did seem like a good investment at the time being. She took possession of the condo nearly a year later and believed that she bought a good investment which will appreciate in value.
Fast forward in time to August 2012; at this point the client decided that she wants to sell her unit and capitalize on her gains. She contacted me and wanted to list her property for sale. I conducted a CMA (comparative market analysis) and the results were shocking to say the least. Similar units in the building, on a higher floor (keeping in mind that there is a $1000 floor premium) were selling for the same price and even a little cheaper ($4000-$5000) than what she had paid for two years ago. This means that by the time she pays the real estate agents, the lawyer fees and land transfer tax she will be in the negative as much as $23,000.
Why The Client Lost $23,000
No Qualified Realtor – The number one reason why this client lost money on her pre-construction condo is because she had no qualified Realtor representing her when she initially purchased the condo. I cannot stress enough the importance of this point. If she contacted a real estate agent who specializes in pre-construction condos prior to visiting the sales center, the Realtor would have explained to her, that the unit she purchased would have NOT been the best for short term investment purposes. The project was already complete, the selection was very poor and the prices at the time where simply too high. A good Realtor would have taken her to other nearby projects where clients have now walked away with positive cash flow. Also, she did not know that a Realtor was free of charge to her since, the builder makes this payment. Another point that is important to make is that having an agent who has access to VIP sale events, ends up saving you even more money. For more on this subject, please be sure to read this post.
Disclaimer: I should also add that by “Qualified Realtor” I do not mean your friend who is a real estate agent and advertises pre-construction condos on craigslist. By qualified, I mean someone who has a president’s club agent status with the builder and has a proven track record with references. It seems more than ever that many real estate agents want to appear to be qualified, but the moment you ask them complex legal questions about a pre-construction condo (such as closing costs, caps and parking ownership rights) they are completely lost. Ask yourself this question – are you more concerned about your investment or your Realtor/friend’s commission? Think twice before you decide who to work with.
Bad Timing – If you are interested in buying a pre-construction condo anywhere, it is imperative that you buy at the early stages of the project. The earlier you buy the better the price. I strongly suggest you pick your unit before the project has actually started construction (hence the term “pre-construction condos”). Many of the pre-construction sales events are by invitation only. Hence get in touch with your local Realtor who focuses on pre-construction condos.
Going back to the case study. I decided to dig a little deeper and find out what other people have paid for similar units in the same building. My findings proved to be exactly what I had anticipated. Back in 2007-2008, similar units in the building where sold by the builder to different agents/people for $30-40,000 cheaper than what the client in the story had paid. If she had bought at an earlier stage of construction she would have easily been positive in cash flow.
Bad Unit – The unit this client bought was from the “left over inventory”, hence it was the unit that nobody wanted. In addition to, she was buying the unit which was already built, so she could not choose her finishes. I truly felt bad for this client, and wished that I could have told her better news.
The moral of the story is as follows. As with any investment, it is important to be educated and surrounded by the right people. Learning of your own mistakes can end up costing you a lot of money, which is why I encourage you to read my real estate blog and always use a qualified Realtor when buying a pre-construction condo.
As we are well in 2012, pre-construction condos in Mississauga continue to be a popular choice for most investors having about $60-80,000 of cash to invest. If you are interested in a pre-construction condo, please contact me and I can help.
This entry was posted on
Sunday, August 26th, 2012 and is filed
The terms “flipping a property” or “flipping a condo” refer to buying real estate at a lower price, with no intention of actually living in the place. The main objective of flipping is to generate profit.
There are two ways one can flip a condo in Mississauga. The more popular way is to buy a pre-construction condo that will generate profit in the future. But rehab properties, fixing them up and then reselling them is another way this can be achieved. In this blog post I want to cover these two methods and provide an insight to anyone who might be interested in condo flipping.
Flipping A Pre-construction Condo
As mentioned above, most investors (I would estimate over 90%) who want to get into real estate turn to pre-construction condominiums. Over the years pre-construction condos have come to be known as “easy investments”, which generate great profit. For further information on pre-construction condos read this article.
Pre-construction condos generally require a total of 20% as a down payment (15% within the first 6 – 9 months, and 5% on closing). The advantage of pre-construction condos is the leverage obtained from this initial deposit. In theory, you are only putting down 15%, yet your property is appreciating at 100% of its entire value for several years, until the condo project is ready.
Here is what you need to know about flipping pre-construction condos in Mississauga:
Not all projects/units are a “good investment” – Despite what you hear, not all projects and units are great investments. Certain condos are known to have greater appreciation than others. It’s your Realtor’s job to guide you in the right direction, and it’s your job to select the right Realtor for you.
Closing/hidden costs– The salespeople at the condo sales center will never warn you about the hidden costs, levies and closing costs associated with buying a pre-construction condo. These fees can go up to $10,000 or more. Having a qualified real estate lawyer review your contract is also a necessity.
Assignment options – Assignment options are sometimes offered by the builder, which allow you the sell your condo unit before the condo is finished. Technically speaking, there is a fee involved and many builders will only allow you to sell your unit when they have sold out the entire project (so you do not end up competing with sales against the builder). Remember, even if an assignment option is offered it does not automatically give you the right to list your property on MLS. Each builder has their own rules. Have your Realtor and real estate lawyer look into the assignment clauses for you.
Timing is key – Timing is everything with pre-construction condos. The best prices and layouts are always offered to agents who bring their clients to special VIP sales events. The good layouts are known to disappear quickly at which time the builder is in no rush to sell the remainder of the units and prices end up being raised accordingly. The earlier you buy the better. If you are a serious investor, then access to the VIP events is a must for you.
2 Pro Tips: 1) Deal only with Realtors who specialize and understand pre-construction condos. Believe me – this will save you time and money 2) The further away the scheduled completion date of the project the better. Keep in mind; real estate prices do fluctuate up and down, but eventually they go up.
Flipping A Resale Condo
Flipping a resale condo is a bit more intricate compared to flipping a pre-construction condo. The process definitely requires more planning and free time. However, when flipping a resale condo the profit is more calculative in nature and is generated within 3 months. The goal is to buy a condo which requires extensive renovations for a low price, completely renovate the place, and within a short period of time sell it.
The process starts off with lining up two very important people – your Realtor and your contractor. Your Realtor should select the best possible properties which fit your criteria. These can include properties which have experienced fire/flood damage, power of sales and just plain out of date condo units. The down payment can vary between 5-20% depending if your real estate purchase is a principle residence or an investment property.
Here is what you need to know about flipping resale condos in Mississauga:
Buying the right property – It’s imperative that your Realtor does a comprehensive CMA (comparative market analysis) to ensure that the condo you are purchasing is in fact cheaper than other similar condos in the same building.
Managing money – It’s very easy to get excited about the renovations and go over the budget. A strict and calculated budget needs to be implemented during the early stages of the condo flip. Your contractor should be able to give you a price breakdown of each individual component of the project.
Managing time – The second pitfall of flipping resale condos is poor time management. Remember, during the period of renovations you are still responsible for the mortgage, maintenance fees and taxes. Therefore, make sure your contractor gives you specific completion deadlines in order for you to manage your budget and time.
Permission from building management – For all condos, any major renovations must be put on paper first, submitted to the condo management office and then approved. This process may take up to two weeks or longer. In addition, the building management may have specific rules and regulations on renovations. Example: Many condos only allow engineered hardwood floors (known as floating hardwood) and do not allow regular hardwood floors.
2 Pro Tips: 1) Do some research and find out what upgrades most buyers are willing to spend money on. Do not “over-upgrade” your unit, as you will not see a good rate of return. 2) Shop around for different construction quotes. You will be surprised to see the difference in quote from one contractor to the next.
In conclusion, pre-construction condos in Mississauga just make more sense for the average investor. With the help of the right Realtor, it is a very smooth process which is known to bring a good financial return. Historically speaking, with an initial investment of $50-70K and a three year wait time, it’s not uncommon to make close to 100% return on the initial investment.
On the other hand, flipping condos may be more attractive to those who work in the construction field. Flipping resale condos can be a dangerous game to pay if you do not know what you are doing. It’s recommended you educate yourself and always plan for the worst case scenario.
Interested in flipping a condo? Contact me. I can help.
This entry was posted on
Monday, July 23rd, 2012 and is filed
With the U.S. experiencing a major economic downfall and the stability in Europe not looking any better, many investors are pulling their money out of stocks and bonds, and investing it into the Canadian real estate market. While the media; such as the Toronto Star, Toronto Sun and The National Post have been forecasting the Canadian real estate market crash since 2005, recent condo sales data indicate otherwise. The latest report, published by the Toronto Real Estate Board, indicated that the average selling price of a GTA (Greater Toronto Area – which includes cities such a Mississauga and North York) condominium apartment in the first quarter of 2012 was $334,495. This was a healthy 3.7 per cent increase from the first quarter of 2011.
It should be acknowledged that certain areas of the GTA appreciated at a different rate than other areas during this time. The two areas I want to focus this blog post on are: The Toronto condo market versus the Mississauga condo market. I will compare the difference in appreciation rate, rental market income and the potential for growth.
A key factor in determining whether Mississauga condos are the better form of investment or Toronto condos is to examine their recent appreciation rate.
Toronto Condos: As indicated by figure 1, in the first quarter of 2012 the city of Toronto produced an astonishing 3,546 condo sales at an average price of $360,892. Comparing these numbers to the previous year, indicates that Toronto condos have risen about 3.5 per cent while the number of condos sales has pretty much remained constant since the first quarter of 2011.
Mississauga Condos: In the first quarter of 2011, the condos in the Region of Peel (which are mainly driven by Mississauga condominiums) have sold on average at $231,010 with 734 transactions on record. A year later the average price of a Peel Region condo has risen by about 6.8 per cent and the number of transactions has increased by 4.6 per cent.
To put these statistics into perspective, a condo bought at the average price in Toronto back in 2011 would have cost $348,779, and a year later it would have appreciated roughly by $12,207 or 3.5 per cent. An average Mississauga condo would have sold for $231,010 in 2011, and a year later it would have been appreciated roughly by $15,708 or 6.8 per cent.
Not only do Mississauga condos continue to outperform Toronto condos in terms of year over year appreciation value, but they also require lower down payments, as they are cheaper in the initial purchase price.
Most investors, who buy resale condos, purchase these units anticipating to lease them out. Establishing a positive cash flow is the primary goal of most investors. A condo becomes a positive cash flow property when the monthly rental money coming in, is more than the monthly expenses related to that property. Despite the fact, that finding a positive cash flow condo unit can be extremely difficult, investors always strive to come as close as possible to the breakeven point.
Toronto Condos: According to the CHMC 2011 Fall Rental Markey Survey, Toronto condominium apartments have a vacancy rate of 1.3%, which is actually really good. Based on my market observations, a typical newer 1 bedroom condo in downtown Toronto currently rents for about $1,400-$1,500 per month. With a 20 per cent down payment on a rental property, a Toronto condo investor can expect to pay roughly $200-300 per month out of their own pocket in order to reach a break-even point.
Mississauga Condos: According to the CHMC 2011 Fall Rental Markey Survey, Peel condominium apartments have a vacancy rate of 0.3% (1 per cent less than Toronto). After reviewing many condos for rent in Mississauga, I have found that a typical 1 bedroom Square One condo rents for $1,300-$1,400 per month. If an investor where to buy a resale Square One condo for rent with 20 per cent down payment, they can expect to pay roughly $100-200 out of their own pocket in order to cover all expenses related to that condo.
Based on the above, it is a no-brainer that Mississauga condos are more attractive than Toronto condos from an investment point-of-view. Rental condos in Peel have a very low vacancy rate, and require little monetary contribution from the owner in order to break even on a monthly basis.
Potential For Growth
When looking at the potential for real estate growth, it’s most important to consider the availability of free land, the likelihood of future demand as well as the room for prices to grow.
Toronto Condos: With over 1900 existing condos, and one new pre-construction condo being launched pretty much every weekend, serious questions are being raised with regard to available parcels of land to build more condos on. Scarce land is not the only problem for Toronto. Critics point out that there could be an oversupply of condos in Toronto, and that $700 a square foot for a pre-construction condo would lead investors seeking alternative condo markets.
Mississauga condos: The infrastructure in downtown Mississauga is much different than the one found in downtown Toronto. Although there are many condos around Square One (roughly 50), there are still numerous parcels of land that are still undeveloped. With prices of resale and pre-construction condos hovering around $450-500 a square foot, many investors understand that the Mississauga condo market is still affordable and has plenty of room to grow.
By comparing the appreciation rates, current rental market rates and the potential for future growth, Mississauga condos do appear to be the “better investment” over the ever so popular Toronto condo market. Many international investors are still unaware of the possibilities offered by the Mississauga condo real estate market, therefore Square One condos can still be understood as an investor’s hidden gem.
This entry was posted on
Tuesday, May 29th, 2012 and is filed
Mississauga is recognized as Canada’s 6th biggest and fastest growing major city. A key contributor to this exponential growth, are the downtown core condominiums. However, with so many condos being constructed around Square One, valid questions are being raised. Can the infrastructure in downtown Mississauga support this new population? Is there going to be an oversupply of condos? How will the real estate market respond to such changes?
All these questions spark interesting debates and everyone seems to have an opinion. If you were to ask five different realtors what they think about the future of Mississauga’s condo market, I guarantee everyone would have a different response.
I think the future of downtown Mississauga depends on 5 key factors:
1. Public Transportation – A lot of residents who live in downtown Mississauga need to commute to work by public transit. Mississauga has already taken measures to improve its own transit system by introducing the MiWay, as well as adapting a new system, known as the LRT system, which envisions connecting Toronto, Mississauga and Brampton. The success and integration of these two transportation systems will be a key contributor to how the downtown real estate market will respond.
2. Infrastructure – As new condos emerge, the city needs to adapt by improving roads, bridges and different infrastructure. An example that demonstrates this to a great extent is the highway overpass on Confederation Road that was added just over 2 years ago. Commuters no longer need to rely on Mavis Road or the very so busy Hurontario Street in order to make it uptown. The city needs to take similar measures in order to support future condo developments.
3. Diversifying Real Estate – Having a bunch of similar box-like looking condos could lead to having a ‘boring skyline’, which would result in buyers losing interest in purchasing condos and ultimately losing interest in Mississauga. Back in 2006, a brilliant move by Mayor Hazel Mccallion was to approve an international building competition that lead to the construction of the famous Absolute World also known as Marilyn Monroe. It might come as a surprise to some residents of Mississauga, that people out of town take road trips just to see these buildings.
Developers need to understand that the key to success in selling more condos lies in making them unique and offering buyers something more. Two recent examples of this that come to mind are; the Onyx condo which offers some beautiful lofts and a gorgeous roof top patio; and the Limelight condo which was the first to introduce a full size indoor basketball court as part of its amenities.
4. Giving People Something To Do! – The city needs more than condos to continue being attractive to buyers. I often hear people criticizing downtown Mississauga, saying that there is nothing to do.
Last year Mississauga unveiled Celebration Square near city hall. Celebration Square includes an entertainment complex with a stage, seating area for thousands and an ice staking ring. The city requires some more creative additions. Some suggestions I heard were: An adult entertainment complex (Dave and Buster’s style), a world class hotel, cafes and perhaps some unique non-franchise restaurants.
5. Planning Ahead – I think that the above 4 points mentioned can be summed up by – Planning ahead. All of these factors require time and money. The city needs to have a solid plan in place, which includes being wary of which condo projects to approve, carefully selecting future transportation routes, integrating infrastructure and making Mississauga a livable city.
What do you think the future of Mississauga looks like? Is there going to be an oversupply of condos? How will the real estate market respond to such changes? We want to hear your opinion!
This entry was posted on
Sunday, May 6th, 2012 and is filed
Over the past few weeks, I had several clients inquire about investing in Square One condos. One question that seems to arise is whether pre-construction condos or resale condos are the better buy. Clients, regardless if buying for principle residence or investment purposes, want to make sure that their real estate purchases appreciate accordingly with the market, and that when they wish to cash out on their condos they have the option to do so.
In this blog article, I hope to give some insight into buying both new and resale condos in Mississauga. I want to cover new and resale condos from both a primary residence and investment perspective.
Prices of pre-construction condos in downtown Mississauga are currently between $420-470 a square foot. To put into perspective, a one bedroom plus den condo that is 650 square foot goes for roughly $270k-$310k. These prices may seem high to some people, but keep in mind that places like Toronto are currently selling between $600-800 a square foot for pre-construction condos. Although, Toronto and Mississauga differ in many ways, this does suggest that the prices of Mississauga condos still have room to grow.
Some people are under the impression that pre-construction condos are cheaper than similar existing condos. This however is not the case. According to my recent observations and market analysis, prices for pre-construction condos are in fact the same or even slightly more (roughly 2-8%) than resale condos. There are numerous reasons behind this. I would argue that the main reason, why pre-construction condos are not cheaper than resale condos, is because of the phenomenon which I like to call “Buying tomorrow’s real estate at today’s prices.” – Meaning, when you buy a pre built condo today, you are more or less paying the market price of today’s resale condos, but you are getting possession of the condo unit in 2-3 years. Hence, the speculation is that by the time you are ready to move in, the real estate market will have appreciated and the condo unit you have bought a few years back will be worth more.
I find that the way pre-construction condos are set up, that they mainly target investors. Not many people are in a financial position where they can afford to dish out $50,000+ on a down payment for their new pre-constructed home, wait 2-3 years until it’s complete and still be 100% confident that the condo they bought today will work for them 2-3 years down the road.
One of the biggest advantages of buying a new condo in Mississauga is that it’s a near worry free investment. Over the past decade people have been buying pre-built condos in Mississauga and capitalizing $30k, $40K and even $50k. With the help of a real estate agent, the process is very simple and straight forward. With most builders, only a 15% down payment is required within the first year and there is no need for mortgage approvals until the date of occupancy.
For those thinking of buying a pre-construction condominium as a principle residence, they should know about some of the perks that come along with this decision. One such perk is that you can choose the layout, floor and finishes according to your personal taste and life style. Another advantage might be that you get a brand new never before lived-in unit.
Although the purchases of resale condos in Mississauga are often similar to pre built condos, the entire process of buying and the strategy behind investing is what sets them apart.
Most people, who buy resale condos, purchase them as a primary residence and not as an investment. As mentioned above, newer resale condos are similarly priced to pre construction condos. Sometimes they are even cheaper than similar pre-construction condos that are offered a block away.
Unlike pre built condos, resale condos offer the option to qualified buyers to be purchased with as little as 5% down. On top of the low down payment structures, advocates of resale condos point out that the buyer has a chance to view the actual condo there are buying and not just a floor plan. Having a flexible move in day is also an advantage worth pointing out.
However, there are certain limitations to buying resale condos. Those who consider buying a resale condo as an investment purpose should consider the challenges they could face with tenants. Also, it is imperative to keep in mind that (historically speaking) resale condos simply do not appreciate as much in value as pre-construction condos. The end result of this is a lower return on investment for the person buying a resale condominium.
In conclusion, every client’s situation is unique and different. There is no universal fit-all answer to what is considered better, pre-construction condos or resale condos in Mississauga.
While the possibility of having higher financial gains over a specified period of time is greater with pre-construction condos, critiques point out that the possibility of gain is dependent on having a strong positive real estate market like we had in the past decade. At the same time, pre-construction condos offer a potential effortless path to making a substantial amount of money in a short period of time.
Resale condos on the other hand, are primarily attractive to those who want to minimize the consequences should the real estate market crash. However, by doing so, those who invest in resale condos often have to deal with tenant issues. Finally, the income produced with resale condos is substantially less than the potential income that could be gained with pre-construction condominiums.
If you are still unsure which direction you want to head in, I would advise that you contact me, so that we can go over all your options and find out which is best suited to you and your life-style.
This entry was posted on
Sunday, April 29th, 2012 and is filed