Filter by Categories
All Condos
Ask Andrew
Insights
New Condos by City
Ajax
Aurora
Barrie
Beamsville
Belleville
Bolton
Bowmanville
Bracebridge
Bradford
Brampton
Brantford
Burlington
Caledon
Calgary
Cambridge
Collingwood
Creemore
Dundalk
Georgetown
Halton Hills
Hamilton
Innisfil
Kawartha Lakes
Kingston
Kitchener
London
Markham
Thornhill
Milton
Mississauga
Cooksville
Mineola
Port Credit
Square One
Montreal
Napanee
Newmarket
Niagara Falls
Oakville
Oshawa
Ottawa
Peterborough
Pickering
Richmond Hill
Smithville
St. Catherines
Stayner
The Blue Mountains
Toronto
Amesbury
Baldwin Village
Bayview Village
Beaches
Bedford Park
Birchcliffe-Cliffside
Bloorcourt
Briar Hill
Brockton Village
Cabbagetown
Canary District
Casa Loma
Chinatown
Church & Carlton
Church & Wellesley
Church St. Corridor
Church-Yonge
Clanton Park
Corktown
Corso Italia
Danforth Village
Davenport
Davisville Village
Deer Park
Distillery District
Don Mills
Downsview
Downtown
East Junction
East York
Eglinton East
Eglinton West
Entertainment District
Eringate
Etobicoke
Fallingbrook
Fashion District
Financial District
Flemingdon Park
Forest Hill
Garden District
Greektown
Harbourfront
High Park
Hoggs Hollow
Humewood-Cedarvale
Junction Triangle
Kensington Market
King East
King West
Lansing
Leaside
Leslieville
Liberty Village
Little Italy
Little Portugal
Long Branch
Mimico
Moss Park
Mount Pleasant Village
Newtonbrook
Niagara
North York
Oakridge
Old Town
Ottawa
Parkdale
Regent Park
River District
Rosedale
Rustic
Scarborough
St. Clair West
St. James Town
St. Lawrence
Stockyards
Summerhill
Swansea
Tam O'Shanter-Sullivan
The Annex
The Junction
The Kingsway
The Queensway
Trinity Bellwoods
Victoria Park Village
Wallace Emerson
Waterfront
West Rouge
Weston
Willowdale
Yonge & Bloor
Yonge and College
Yonge and Dundas
Yonge and Eglinton
Yonge and Finch
Yonge and Lawrence
Yonge and Richmond
Yonge and Sheppard
Yonge and St. Clair
York Mills
Yorkdale
Yorkville
Uxbridge
Vaughan
Maple
Thornhill
Woodbridge
Waterloo
Welland
Whitby
Whitechurch-Stouffville
New Condos by Deposit
10% Before Occupancy
15% Before Occupany
20% Before Occupancy
5% Before Occupancy
New Condos by Developer
16th Avenue Development
Ace Development Ltd
Acorn Developments
Addington Developments
Adi Development Group
Allegra Homes
Alterra Developments
Altree Developments
Amacon
Amalfi Homes
Amexon Development
AMICO
Andrin Homes
Angil Development
Aoyuan International
Aragon Properties Ltd
Arkfield Development
Armour Heights Developments
Artlife Developments
Arya Corporation
Ashcroft Homes
Aspen Ridge Homes
Baif
Balder Corporation
Ballymore Homes
Bazis Inc
Benvenuto Group
Biddington Homes
Blackdoor Development Company
Block Developments
Bloomfield Homes
Branthaven Homes
Briarwood Development Group
Brixen Developments
Broccolini
Brookfield Residential
BSäR
Burnac
Cachet Homes
Caivan Communities
Camrost-Felcorp
Canderel Residential
Canlight Realty Corp
Capital Developments
Capital North Communities
Carlyle Communities
Carriage Gate Homes
Carttera Private Equities
Castlebridge Development Group
Castleridge Homes
Castleview Developments
CentreCourt
Centrestone Urban Developments Inc
Centreville Homes
Chestnut Hill Developments
Choice Properties REIT
Choo Communities
Cityscape Development Corporation
Cityzen
Claireville Holdings Limited
Cliffside Homes
Clifton Blake
Coletara Development
Collecdev
Concert Properties
Concord Adex
Condoman Developments Inc
Conservatory Group
Constantine Enterprises Inc.
Consulate Development Group
Context
Core Development Group
Cortel Group
CountryWide Homes
Craft Development
Creek Village Inc.
Cresford Developments
Crown Communities
Crystal Homes
CTN Developments
Curated Properties
Cystal Glen Homes
Daniels
Dash Developments
Davpart
DBS Developments
DC&F Corp
Devron
Dez Capital
Diamante Development
Diamond Kilmer Developments
Diamondcorp
Dicenzo Homes
Distrikt Developments
Doornekamp Construction Ltd
Dormer Homes
Downing Street Group
Dream Unlimited Corp
Dundee Kilmer
DVLP Property Group
Eden Oak
Edenshaw
ELAD Canada
EllisDon Capital
Emblem Developments
Empire Communities
Evans Planning Inc
Evertrust Development
Evertrust Development Group Canada
Fengate
Fernbrook Homes
Fieldgate Urban
Fiera Real Estate
Fifth Avenue Homes
Firmland Development Corporation
First Avenue Properties
First Capital
Flato Developments
Forest Green Homes
Forest Hill Homes
FRAM + Slokker
Freed
G Group Developments
Gairloch
Gary Silverberg
Gemterra Developments Corporation
Genesis Homes
Georgian International
Geranium
Globizen Developments
Gordon Wells Ltd.
Granite Homes
Graywood
Great Gulf
Greatwise Developments
Greenfield Quality Builders
Greenland Group
Greenpark Group
Greenwin
Greybrook Realty
Guglietti Brothers
H&W Developments
Hans Group
Harhay Developments
Harlo Capital
Haven Developments
Hazelview Properties
Heathwood
Hi-Rise (West) Inc.
Homes by DeSantis
Hullmark
Hyde Park Homes
i2 Developments
Icon Homes
iKORE Developments Ltd
IN8 Developments
Investissement SM Immobilier
Ironwood Bay
JCF Capital
JD Development Group
KAD Development Group
Kaitlin Corporation
Kaleido Corporation
Kalovida Canada Inc
Kaneff Corporation
KBIJ Corporation
Kilmer Group
Kingdom Development
KingSett Capital
Knighstone Capital
Knightstone Capital
Kroonenberg Group
Kultura
La Pue International
Lakeview Development Holdings Inc
Lalu Canada
Lamb Developments
Lancaster Homes
Lanterra
Lash Group of Companies
Latch Developments
Laurier Homes
LCH Developments
Les Entreprises QMD
Liberty Development
Liberty Hamlet Inc
Lifestyle Custom Homes
Lifetime Developments
Limen
Lindvest
LJM Developments
Lormel Homes
Madison Group
Malibu Investments
Manorgate Homes
Mansouri Living
Marlin Spring Developments
Marydel Homes
Matrix Development Group
Mattamy Homes
Mayfair Homes
MDM Developments
Medallion Capital Group
Menkes
Metropia
Metroview
Minto
Mizrahi Developments
MOD Developments
Monde Development Group
Mutual Developments
Nahid Corp
Nascent Developments
National Homes
New Horizon Development Group
Newgard Development Group
Nexus
NOCO Development Company
Norstar Group of Companies
North American Development Group
North Drive
North Edge Properties
Northam Realty Advisors
Northrop Development
Nova Ridge Development Partners
NYX Capital
Old Stonehenge
ONE Properties
One Urban
Options Development
Originate Developments
Oxford Properties
Parallax Development Corporation
Patry Inc Developments
Pemberton Group
Phantom
Phelps Homes
Pinnacle International
Platinum Vista
Plaza
Plaza Partners
Podium Developments
Presidential Group
Primont Homes
Profile Developments Inc
ProWinko
Quadcam Development Group
QuadReal
Queensgate Homes
RAJACan Developments Inc.
ReBuilt Construction
Reids Heritage Homes
Republic Developments
Reserve
Residences at Bluffers Park
RioCan
Rise Developments
Riverking Developments
Rivermill Homes
Rogers Real Estate Development
Rosehaven Homes
Rosewater Developments
Rowntree Enterprises
Royalpark Homes
Royalton Homes
Sag Development Corp
Sage Development Corp
Sapphire Construction of Niagara
Saxon Developments
Scholar Properties Ltd
Sequoia Grove Homes
Seven Numbers Development
Sherwood Homes
Shiplake Properties Limited
Sierra Building Group
SilverCreek Communities
Sina Development Inc
Skale Developments
SkyHomes Corporation
Slate
SmartCentres
Solmar Development Group
Solotex Corporation
Spallacci Homes
St. Regis Homes
St. Thomas Developments
Stafford Homes
State Building Group
Sterling Group
Sundance Homes
Sunny Communities
Sunrise Gate Homes
Sutherland Developments
TAS
Tercot Communities
The Brown Group of Companies
The Goldman Group
The Gupta Group
The Hi-Rise Group
The Remington Group
The Rockport Group
The Rose Corporation
The Sher Corporation
Tiffany Park Homes
Times Group Corp
Townwood Homes
Treasure Hill
Tribute Communities
Tricar
Tricon Developments
Tridel
Trinity Development Group
Triumphant Group
Trolleybus Urban Development Inc
Trulife Developments
TVM Group
United Lands
UrbanCapital
Urbane Communities
Valery Homes
VANDYK
VanMar Developments
Venetian Development Group
Vermilion Developments
Vintage Park Homes
Wabash Heights Developments Inc
Westbank Corp
Westbank Corp. and Allied Properties
Westdale
Woodcastle Homes
WP Development Inc
York Trafalgar Homes
Yorkwood Homes
Zancor Homes
New Condos by Occupancy Year
2019
2020
2021
2022
2023
2024
2025
2026
TBA
News
Podcast
True Condos Approved
Uncategorized
Videos
Filter by content type
Taxonomy terms

Priced Out of Toronto? Do This.

Are you priced out of the Toronto condo market? Are you ready to invest but the prices of condos in Toronto have shocked you? Are you an existing investor and you are finding it hard to add more units to your portfolio in Toronto? Find out what you can and should do if you are finding yourself priced out of Toronto.

Andrew la Fleur: The Toronto condo market has changed so much in the last couple years. Prices have risen dramatically and a lot of people are feeling priced out of market. So I wanted to create this video for you specifically if you feel that way, if you feel like you want to invest in the Toronto condo market, but you feel like prices have just gotten way beyond what you’re able to afford. And so I wanna give you a couple real strategies that you can actually use to get into the Toronto condo market, and how, as I said, you can actually be a massively successful investor in Toronto, even if you feel like you can’t. So sound good, let’s jump into it.

Here’s the situation. You have around $40,000 to $60,000 available to invest in a property. However, the average entry-level condo downtown now is about $500,000. So with 15 to 20% deposits required, you need about $80,000 to $100,000 to invest in the Toronto condo right now. Something you don’t have, it’s a very frustrating situation, and I again I wanna give you a couple of strategies to take your frustration to state of feeling good about yourself and feeling that you can actually participate in this market. So it makes sense, all right, let’s jump into it.

You might have some objections to this whole concept before we even get into it. And one of the things you might be saying is, “Andrew, I mean there’s gonna be something I can buy under 500,000. Aren’t there studios or something out there we can get into?”

Well, yeah, sort of maybe not really. There’s really nothing available under 500,000. I don’t know how else to say it. There is nothing to buy under 500,000 downtown right now. If anything does come up in the form of a new condo launching coming out, if they have a few studio units in the building, there are 20 buyers waiting and lined up. People just like you who see the value in the downtown core, who wanna invest in the downtown core, they have some money, but they don’t have enough money to get into those $500,000-$600,000 plus units. It’s just very very difficult and not a great strategy to just wait and hope that you can maybe get one of these units, when as I said, there’s 20 buyers for every one of these units, even if you can find them, right now there is absolutely nothing.

Another objection you might have is can’t I just buy in the suburbs? Can’t I just go outside the city into the 905 areas around Toronto, buy something there for under 500,000?

What you find in those markets is while the price per square foot is less, the unit sizes are lager, you have to buy parking often, and you have to buy lockers often, or often they just … It’s included in the price. And the entry level price in these markets is actually not that different from what we’re seeing downtown. You’re still pushing that 500,000 mark as an entry-level point in the suburbs.

Bottom line of investing in the suburbs I would say is be very careful if you do decide to do that strategy. A lot of people who’ve invested in the 905 in the last 10 years have regretted that decision, they haven’t done as well as if they had put that same money into the downtown core, or into other options which we’ll get into.

Another objection you might have is can’t I just buy something resale? Okay, pre-construction is expensive, I get it, there’s nothing to buy under 500,000 but I’m looking at REALTOR.ca and I see here’s some condos that are out there for less than 500,000. Can’t I just buy something like that?

Well, a few things. One is it’s very hard to find anything good under $500,000. You might be able to find something crappy, something that I would not recommend as an investment, but I don’t think that’s something that you should invest in. The other thing is even if you do find something under 500, it’s bidding wards galore. Everything under 500,000, multiple offers, sold prices way over asking. Remember, as an investor, you come in and you try to buy one of these properties, you are competing against a lot of first time buyers, people buying for themselves, people who have mom and dad’s money behind them in a lot of cases. These are emotional buyers, and you’re competing against that. Somebody throw an extra $20,000 to $30,000 on top of what you offered is nothing to folks like that. So keep that in mind.

Cash flow, you’re not gonna get cash flow. So you have to put 30-35% down to get cash flow based on today’s resell prices and today’s existing rents. So again you’re back in that situation where if you need 30-35 down, again, you need now a $100,000 just to get that same property, which you don’t have.

If you can somehow make the numbers work and buy that property if you find something cheaper, you’re gonna be negative cash flow every month. Do you wanna have that? Probably not.

And finally the stress test. It’s very difficult to get a mortgage right now in the resale market versus buying pre-construction, you have three, four, five years, before you need to get that mortgage.

So my advice, what you should do, that’s what this video is about. I wanna give you a couple of strategies, do these things if you’re in this situation.

Preamble before I get to those two things is if you’re close, if you’re sort of almost at that point where you have that 80 to $100,000, if you’re a few months away, then just keep saving until you get there and invest downtown. But for most people watching this video, you’re probably thinking I’m years away from being able to have that 80 to $100,000 to invest sort of range. So what should you do?

Well, number one is should but outside of the GTA. So look further afield to cheaper markets that are also good markets to invest in. The game plan with this strategy, and it’s a strategy that I personally have used myself, many of my clients have used, both the strategies I’m gonna talk about today, I’ve personally done in the last year, and most of my clients are also doing or in the process of doing as well.

The game plan is to start building equity now and to bring it back into Toronto in a few years. So rather than wait and do nothing, put that money out there, get it invested, start building that equity, and in a few years, you’ll be in a better financial position, you’ll have grown some wealth through doing that, and you’ll be able to bring that money back into downtown Toronto.

Or if you’re an existing condo investor, it’s a way to diversify your portfolio. If you’re feeling like you wanna add more in Toronto but you’re priced out, it’s an opportunity for you to still continue to add to your portfolio in growing markets.

So the markets that you wanna focus on in Ontario have thee factors; strong job growth, major transit investments, and very low vacancy rates. These are the three things that you wanna look for in any market that you’re investing in outside of Toronto. These are the three factors that has made Toronto and downtown Toronto a successful market to invest in for the last x number of years, forever pretty much.

So the three markets that we have focused on this year, and we’ve recommended our clients to focus on that. As I said, myself personally have invested in as well. Ottawa Kitchener, or Hamilton. These three markets are great urban centers, and we’re talking specifically about the downtown cores in these markets, not the outer area, specifically the downtown core where a lot of investment, revitalization, transit, jobs are coming in. This is where you wanna be. These three markets offer tremendous value compared to Toronto.

So what you should buy in these markets is basically focus on smaller cheaper units like studios, one bedrooms, one bedroom+dens, and smaller small two bedroom units.

So this is basically the core key strategy that we have been using in Toronto, again, for the last 10 years and doing very very well with focusing on the smaller investor-friendly sort of units that are gonna give you the best rent, price-to-rent ratios when you’re renting these units out.

You might have some objections to this idea. So the first one might be, “Andrew, it’s too far away, I don’t wanna invest in these places that are so far away from where I live. I live in the GTA.”

Well, here’s the thing, distance is only a problem if your presence is required. Right? And the beauty of buying condos, especially brand new preconstruction condos, they are a very passive type of investment compared to other types of real estate investment. So your presence is not required 99% of the time. I have owned condos as far away as Florida, in a different country, it’s a plane ride away. It’s a totally different country, and the condo I owned in Florida for example, I owned for about five years, I never set foot in the property when I bought it, I never set foot in the property when I sold it. During that five year period, I just set foot in the property once just ’cause honestly I just wanted to see what I had bought, and what I own, and check it out and say hi to the tenant. But I could’ve owned that property for that entire time without ever setting foot in it. And that is the beauty of buying a low-maintenance passive type of investment, like a brand new condo.

If you get a good tenant in place and you do the hard work of getting a screening and vetting a good tenant, that is 95% of the battle when it comes to condo investing. And that’s why condos are such a great investment.

And remember, we have partners in all these markets to take care of that process of finding those tenants and renting them out for you. You don’t have to do anything, you don’t have to physically be there. We can take care of that for you.

Another objection you might have is, “Okay, Andrew, the whole premise of this is downtown Toronto is the place to invest. When you go outside of that, you’re getting slower growth rates, so isn’t that bad? We shouldn’t invest in these other areas, ’cause they’re not as good as downtown, right?”

Well, the concept here is probably yeah, you’re right, that’s absolutely true. But it’s better to do this than it is to continue to wait and do nothing, and you’re just gonna continue to be priced out even more than you are now from the market in Toronto.

And again, the idea is you start building the equity now that if you want to, you can bring that equity back to Toronto and you’re growing your wealth, and you’re using that leverage to grow that capital available to you in the future that you can then bring back into Toronto, if that’s what you decided that you wanna do with that.

Another objection is and these markets outside of Toronto, a lot of people say, “Oh, these are like small cities, it’s not like Toronto, it must be hard to find tenants in these places, right?”

Well, no, that couldn’t be further from the truth. This is why we recommend, we pick specific markets that I mentioned already, your Kitchener or Ottawa-Hamilton, these markets where the rental market is red hot. People are lining up to rent properties in these markets. Landlords have their pick and multiple tenants to choose from. And there’s virtually no new rental supply that’s been added to these markets as well, which is huge.

And remember, we’re doing this for you. We have partners in all these markets that take care of the renting process for you. In some cases, developers even giving rental guarantees where they do everything for you as well.

Number two strategy. So number one was buying outside of GTA, the second strategy I wanna share with you is to double your buying power by buying with a partner. Right? It seems pretty straightforward but a lot of people are not thinking about this or considering this option, I’m telling you, you should.

So the game plan here is to start building equity now in downtown again, rather than be priced forever. It’d be great if you can do everything on your own in life and not have to rely on anybody else, but sometimes two is better than one. When you can partner with someone it gives you new capabilities.

So what you should buy in this case is continue to buy those small units that we talked about that are always the best units for investment. But you wanna also look at buying larger two and three bedroom units in the $800,000 and up sort of a range. And we’ll get into that in a second as to why.

Now, first objection is buying downtown, like I can’t afford that, like why are we talking about this? The whole point is I can’t afford it.

Well, again, it’s a bit of a mental leap, but you need to think about what you would be able to do if you had a partner doing it with you.

Partnering allows you to buy units that you never thought were possible, price points you never thought possible. It also allows you most importantly to buy in locations and buildings that you never thought possible. Whereas if you’re trying to buy on your own, you’re just trying to squeeze into the margins of downtown to the B and C locations, B and C type properties downtown. Suddenly if you have a partner, you’re doubling your buying power, then it now suddenly opens you up to new possibilities where you can buy in the prime prime buildings in the prime areas, that in the long-term are always gonna be of course the best places to invest.

Another objection is who can I trust to partner with? Like sure, this sounds good, but like I don’t … you know it’s money, I don’t wanna get into partnerships, it’s too risky, things can go wrong.

A couple tips whatever you decide. Make sure your goals and values are aligned from the start. And the second tip is … I find that in my experience it tends to works best when one investor is sort of driving the process, and the other investor is more of a passive, more of a background, more of a silent partner type of investor, and sort of just goes along with the recommendations of the other person. So you don’t have two people trying to drive and take in different directions and butting heads. So a couple of tips there.

Another objection around this idea is, you know I talked about bigger units, buying more expensive units. Bigger units, aren’t they bad for investment?

Well, here’s the thing. Some of the best deals that we’re finding in pre-construction right now are the larger, more expensive units. Again, the reason is that it’s very easy for builders to sell units for 500-600-700,000, those things are flying off the charts. But when you start to get above 700-800-900,000, it’s harder to sell, because you need … This is not like the old days where the most expensive unit in a building would be 600,000. No, that’s like now the entry points. So there are fewer and fewer buyers the higher up the price spectrum you go that have the financial capability to do that on preconstruction.

So builders, some builders, not all, but some builders who are fighting in response are lowering their prices. And the best value in some of these buildings is actually the larger units. So there’s a little secret and something to think about.

Also keep in mind the resale market downtown today is almost $800,000, the average resale condo that is sold in downtown Toronto today is about almost $800,000. So there are plenty of units selling for over $1 million now. Like this is again, not like three/four years ago where everything was sort of in the 400 to $600,000 range, there’s plenty of properties that are selling way above this price. So you need to know and understand that about the market.

Talk about the rental market. So rental market, two bedrooms, 3,000 to 3,500, three bedroom units are $4,000 plus. If you’re buying pre-construction, it’s not gonna be ready for five years, just imagine where the rental prices are gonna be on those larger units in four or five years. The cash flow I think is gonna be actually very good on a lot of these units.

Renters are partnering up as well. So a lot of renters, they can’t afford to have their own place, they’re looking for places to share with other people. So two people getting together and renting a two-bedroom or three people renting a three bedroom. Just like we’ve seen forever in cities like Manhattan, we’re starting to see this more and more here in Toronto, it’s become more and more common.

And finally with the units that you’re buying, we’re talking about buying in prime buildings, in prime locations. These properties are always in demand, whether it’s small units, big units, anything, they’re always in demand. Sure, if you’re buying large units in E, C location, then you might run into difficulty in the future with that. You wanna focus more on the smaller units in those crappy outer locations. But if you’re buying in prime downtown, the larger units are always gonna be in demand to buy and to rent.

So there you have it, that is the presentation I have for you if you’re priced out of Toronto, and how you can actually become a successful investor even despite of that fact, the two key strategies again are buying outside of the GTA, and double your buying power with another investor.

I hope you enjoyed this video. If you did like this video, sharing is caring, go ahead and send this out, email this, share this with somebody that you know, post it on social media, I really appreciate that. And again, if you wanna get ahold of me, my contact information is right here, Andrew@truecondos.com 416-371-2333. And until next time, happy investing.

Tags