How Much Do Studio Condos Rent For In Regent Park?
So you are thinking about investing in a studio condo in Regent Park and you are probably wondering,how much do studio apartments (condos) rent for in Regent Park? And how much do they cost to buy? Are studios in Regent Park a good investment?
As the owner of 2 studios in Regent Park, and a huge proponent of studios in Regent Park for investment, this is a question I get asked very often.
Let me answer the question by first telling you a little about my story investing in Regent Park studios.
My Story of Investing In Studio Condos In Regent Park
I bought my first unit in Regent Park in Fall 2010. The building was One Park West. It was the second condo building to launch in Regent Park. The first was One Cole a year before that.
I had a client who wanted to buy a studio so I went through the usual process and got them the suite they asked for. But this client changed their mind and decided not to buy the unit so I decided to buy it myself. It was a 301 sq ft studio on the 12th floor. The price was $165,000. Side note: many people thought I was insane for paying “so much” money for a tiny little studio in Regent Park. Little did I know at the time but I had just bought The Smallest Condo In Toronto.
When I bought the unit, part of my decision making process was to try to anticipate if my rent would cover my costs. So in Fall 2010 I had to try to predict what my unit (the smallest condo in Toronto) would fetch on the rental market in Fall 2011 when it was scheduled for occupancy.
Studios were a very new thing at the time and I had almost zero raw data to go on. So I had to estimate what rent would be in Regent Park for a very small studio given that studios at the time downtown were getting around $1200/month on average.
I estimated that a studio in a developing area like Regent Park would get around $950/month. I did the math and I said that if the unit gets $950/month then I would be happy and my costs would be covered each month.
I never planned to flip the unit, I was always thinking to hold the unit for 5 years until the neighbourhood was more built up and established so I was quite alright with break even cash flow.
Fast forward one year later and I found that rents had risen quite a bit. Average studios downtown were now going for about $1300. So I ended up getting $1090/month in rent. I was very pleased.
Then in the spring of 2013 when my first tenant moved out and I was looking for my second tenant, what do you know, but rents on studios had risen again. And this time there were more studios that had rented in Regent Park so I had more data to look at.
I ended up getting $1250/month this last time around even though I rented it at a bad time of year. (The best time to rent a condo downtown is in August when all the students are coming back to the city looking for housing).
Now today, studio condo rental prices continue to increase in Regent Park. The average rental since August 1st of 2013 until today is $1324/month. Several units have rented for as high as $1375/month.
If you had told me back in 2010 when I bought my first studio in Regent Park that units would be renting for $1375/month just 3 years later I would have said you were insane (but I wish someone had told me that so I could have bought more).
I should also add that a sub 400 square foot studio on a low floor just sold for $235,000 in Paintbox Condos just last week. This is a finished resale building that was completed 1 year ago in Regent Park.
So What Should You Do If You Want To Buy A Studio Condo For Investment In Regent Park?
If you want to buy a studio condo in Regent Park today, there is virtually nothing available on the resale market, BUT One Park Place South Tower is launching to Platinum VIP brokers right now and studios there have an average starting price of about $200,000.
So you can get a studio for around $200K that will rent out for around $1300-$1375/month if it existed today. But of course it won’t be ready for another 1.5 years or so which means rents will probably be another $50-$75/month higher than today.
At today’s mortgage rates and based on $130-$1375/month you are looking at $250-$300 per month positive cash flow.
Now imagine if you owned 3 or 4 of these units and held them for the next 5-7 years while Regent Park gets built out.
This is why I tell everyone that buying a studio in Regent Park for investment is “No-Brainer”. The cash flow numbers and potential ROI are just amazing – and in the condo investing world that’s rare.