Poll of the Day > Signed off on a condo, cuz buying a house alone was impossible. Whelp.

(+) Yeah! (+)

It's pre-construction, not even downtown, and it's already costing me half a mill. Jesus.

Resale value on this thing will be bananas.

I've been waiting for prices to stagnate for over 3 years so I could buy a house, reno it, and live in the basement while renting out the rest, but a house on a single income was proving more and more impossible, so I bit the bullet.

I'm going to only be eating black beans and rice for a few years now. Wish me luck.
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What are the condo fees?
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supergamer19 posted...

not even downtown

I'm starting to detect the source of your problems.


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Doctor Foxx posted...

What are the condo fees?

Estimating just under 400 bucks a month. With the mortgage and property tax and all that, I'm looking at probably 2 grand a month. I might just rent it out.
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supergamer19 posted...

Doctor Foxx posted...

What are the condo fees?

Estimating just under 400 bucks a month. With the mortgage and property tax and all that, I'm looking at probably 2 grand a month. I might just rent it out.

What the fuck that's obscene. You're paying almost 5k a year every year in fees. Until they raise it and you're paying more. Plus mortgage, utilities, taxes, etc. on a half mil condo?? That's really fucking expensive. You're not going to turn any profit renting at 2k monthly.
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Back out of this... Unless you're in one of the biggest metropolitan areas with a housing shortage you are going to be on the hook in a huge way when that price goes down
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Doctor Foxx posted...

Unless you're in one of the biggest metropolitan areas

I live in Toronto.

I actually got a pretty sweet deal with this one, and could probably sell it on occupancy for at the very least 100K more. Before taxes of course. There's no way I'd rent for only 2 grand lol
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Hey Fox, rereading my post, I think I came off like an ass. I didn't mean to. Thanks for looking out.
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supergamer19 posted...

Hey Fox, rereading my post, I think I came off like an ass. I didn't mean to. Thanks for looking out.

Nah you didn't. TO explains it. That bubble has longer to burst. I'm always amazed at the VAN/TO condo prices. When the bubble burst in Alberta people lost out pretty hard on their overpriced properties. Many of the under construction condos never materialized either. But it's different there, you have a legit shortage of housing in the city that will remain regardless of things like resource prices.
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Housing is way too expensive these days. The house I'm renting costs over 2K a month.
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Toronto is notoriously expensive. Should have moved to the US where dreams come true.
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Yeah, if the property value drops or the real estate market starts to tank, you'll owe more than it's worth in a hurry. The same thing happened to my older brother 10 years ago.
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I'm not saying that a crash is impossible, but 2008 was the fault of the US banks being idiots with their approvals. Canadian banks are notoriously stingy to avoid situations like that. In fact, qualification standards have gotten harder since the new year even though interest rates went up. Prices won't be going down anytime soon, unless some sort of war or disaster blows through here.
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I got lucky when i bought a house. I bought it before the bubble started growing, and a couple years later sold it for more than double what I paid for it.
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supergamer19 posted...

I'm not saying that a crash is impossible, but 2008 was the fault of the US banks being idiots with their approvals. Canadian banks are notoriously stingy to avoid situations like that. In fact, qualification standards have gotten harder since the new year even though interest rates went up. Prices won't be going down anytime soon, unless some sort of war or disaster blows through here.

Oh, you're Canadian. I didn't know. You should be fine then.
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supergamer19 posted...

I'm not saying that a crash is impossible, but 2008 was the fault of the US banks being idiots with their approvals. Canadian banks are notoriously stingy to avoid situations like that. In fact, qualification standards have gotten harder since the new year even though interest rates went up. Prices won't be going down anytime soon, unless some sort of war or disaster blows through here.

I'll tell you those bubbles can and do burst up here. Canada is going to have an even worse plummet with housing values as soon as foreign property ownership is addressed
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Doctor Foxx posted...

I'll tell you those bubbles can and do burst up here. Canada is going to have an even worse plummet with housing values as soon as foreign property ownership is addressed

I'm keeping my eye on Vancouver since they will go through all that first, being closer to Asia and what-not.
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https://globalnews.ca/news/3773995/toronto-housing-bubble/

http://gordcollins.com/real-estate/toronto-housing-crash/

http://www.macleans.ca/economy/realestateeconomy/torontos-deflating-housing-bubble-in-one-chart/

Looks like buying now is better than it has been in a few years but isn't nearly as good as it's probably going to be in the next few years. You might be caught out to dry with this. You might also come out on top. It's good to get equity instead of just paying rent.

Ontario implemented a foreign property ownership tax in April last year and sales bottomed out. Prices haven't really followed that decline but they will need to.

...I'm still a little shook losing ~20% of home value in 3 years here. That was a nice ~100k pile of debt.
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Doctor Foxx posted...

Prices haven't really followed that decline but they will need to.

I thought so to, but now I'm starting to debate it. Even with the harder stress tests, the minimum wage increase, and the foreign sales tax, nothing seems to be tanking. Slowing down a bit, sure, but it's still overwhelmingly a buyers market. Everything is literally being picked up before its even built, it's insane. I know of one house only that decided to take itself off the market. The owner went all out and straight up asked for a million dollars instead of letting a bidding war happen.

It wouldn't have hit a million with a bidding war anyway, so he just took himself off the market.

I think if anything does happen, it'll happen to Vancouver first. If nothing happens, Toronto is going the way of New York, where prices never decrease.
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Doctor Foxx posted...

It's good to get equity instead of just paying rent.

This is 100% an investment. I'm expecting it to increase in value, and when the time comes for closing, I will have to debate with myself about selling it and using the profits to buy an actual house. I'd love to say I made it as a home owner completely on my own, for some reason.
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investing in the peak of a bubble seems like a bad idea.
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supergamer19 posted...

Doctor Foxx posted...

It's good to get equity instead of just paying rent.

This is 100% an investment. I'm expecting it to increase in value, and when the time comes for closing, I will have to debate with myself about selling it and using the profits to buy an actual house. I'd love to say I made it as a home owner completely on my own, for some reason.

Yeah I'm just telling you from experience if it doesn't increase much or heaven forbid the assessed value drops below your purchase price it's a world of shit. Like potentially being trapped in an overpriced mortgage or ending up bankrupt with no property. Over the course of 10 years you're paying 50k in condo fees, minimum. Condos generally don't resell as well as homes do. Provided you have something that's 2 or more bedrooms that's your best bet. It's hard to say. I don't want the TO housing market to collapse, but it will need to drastically decrease if younger people ever hope to own homes in the GTA


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Please Listen to the good doctor. Condos are a horrible horrible investment idea and rarely ever break even.
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Please tell me it's not a stacked condo at least or if it is you're on the top floor.

My wife and I are currently working out buying our first home, also a condo in Toronto. Haven't decided on anything, just started looking at listings and hired a realtor earlier this week.

So, I wanted to point out a few things to @Doctor_Foxx. Those sources are all at least 6 months old. The newest one is from July of last year. I assume they were all in reaction to that new tax on foreign buyers passed mid last year. Which didn't really have as big of an effect as many had thought it would.

Another thing to note is the market has already cooled since then. Market value and property value inflation have fallen or leveled out since then, possibly in reaction to the tax, but it's kind of steadied out. I still wouldn't call it a certain market though.

My wife and I have been watching the real estate market for a few years and they've been honestly saying Toronto could be in a "bubble" for around 10 years now if you look back. TBH, I don't see the market REALLY tanking, but who knows. If anything recently would have tanked it, it would have been the tax last year.
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I guess expect it to increase. Anyone buying property does or it would be foolish.

but be totally prepared for the possibility you will be on the hook for the full mortgage and interest over your loan period and may not recoup that initial value. If you have a 20 year mortgage you will also not recover the 100k+ in condo fees at any point. If you can afford that potential loss then you're set.

If you want the best possible chance at recovering money don't buy presale condos ever! You have no idea how close to what you will get is to what they sold you, nor do you know what the neighborhood and surrounding amenities will be by the time you can move in. Apparently you also pay HST on new builds and not resales. A good deal is not necessarily a good financial investment.
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Doctor Foxx posted...

I guess expect it to increase. Anyone buying property does or it would be foolish.

but be totally prepared for the possibility you will be on the hook for the full mortgage and interest over your loan period and may not recoup that initial value. If you have a 20 year mortgage you will also not recover the 100k+ in condo fees at any point. If you can afford that potential loss then you're set.

If you want the best possible chance at recovering money don't buy presale condos ever! A good deal is not necessarily a good financial investment.

That's weird, I have several clients who are real estate agents in the GTA and more than one of them have told me that presale condos have been one of the most consistent money making investments in the real estate market in recent years. I even know multiple family friends who bought presale condos and resold them before the buildings were even finished being built for a very substantial profit. In some cases, the same construction company who sold them the condo in the first place offers to buy it back from them for a pretty substantial profit, due to how much the market went up.
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GameReviews posted...

. I even know multiple family friends who bought presale condos and resold them before the buildings were even finished being built for a very substantial profit

Its a quick way to make 50K to 70K, before all the fees.

JennyBear posted...

Please tell me it's not a stacked condo at least or if it is you're on the top floor.

Top Penthouse floor (no floors above me), 21st floor, two bedroom two bath, facing the south side (I get the trajectory of the sun, I'm facing a huge park, and I believe one could see the CN Tower on a clear day), a parking spot, and a storage locker.

I think I got a sweet deal because the sales rep messed up and I got offered the highest floor at a discount with the locker for free and the parking spot also at a discount. I think the thing could sell itself if I decide not to keep it.

Stacked condo is those weird townhome looking ones, right?
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No you're in a stacked condo. Vertically stacked. Just from my job I know that condo communities have a ton of water damage claims so I would never want to be in a condo that has units above it.

JennyBear posted...

I would never want to be in a condo that has units above it.

supergamer19 posted...

Top Penthouse floor (no floors above me)

I guess I lucked out.
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Yeah, definitely. Just make sure you review your CCRs ASAP so you know what you're responsible for if there is damage that originated in/from your unit. A lot of newer HOAs have strict liability but if it's an older HOA you may only be responsible for repairing your portion of your unit that is leaking. If you want I can take a look at them when you receive them. It'd only take a couple minutes for me because I read them all day.

GameReviews posted...

Doctor Foxx posted...

I guess expect it to increase. Anyone buying property does or it would be foolish.

but be totally prepared for the possibility you will be on the hook for the full mortgage and interest over your loan period and may not recoup that initial value. If you have a 20 year mortgage you will also not recover the 100k+ in condo fees at any point. If you can afford that potential loss then you're set.

If you want the best possible chance at recovering money don't buy presale condos ever! A good deal is not necessarily a good financial investment.

That's weird, I have several clients who are real estate agents in the GTA and more than one of them have told me that presale condos have been one of the most consistent money making investments in the real estate market in recent years. I even know multiple family friends who bought presale condos and resold them before the buildings were even finished being built for a very substantial profit. In some cases, the same construction company who sold them the condo in the first place offers to buy it back from them for a pretty substantial profit, due to how much the market went up.

If you get a good builder that delivers what was advertised you can generally sell it right after for some profit. That takes money to make money? Yep there's so many people buying and reselling things and pricing others out of the market.

Not all builders deliver what they sell you. Sometimes it doesn't make a big difference in what you can get, other times it's a big issue.

Yes realtors love to buy things to flip. And buying to flip is probably a safe bet for a new Toronto condo. Keep in mind any realtor is not losing out on nearly as much commission doing so vs your average buyer. They're not buying the units to live in the condos. That's where the issue is likely to come up: several years down the line. When condo fees have increased 20% and there are newer better units to attract buyers with those discounted prebuild rates.

Realtors will often tell you whatever they need to in order to get you to sell or buy property with them. Some realtors are trustworthy. Most in my experience are more concerned about their commission than your long term satisfaction with s property in a market that large. I don't doubt at all they'd be willing to buy those properties and resell, but I do doubt any of them are buying these units to live in and hold on to longer term. Which is what the TC seems to be doing.

Sounds like super got a good unit though. Top floor will resell. Hope the builder is legit and you don't get hit with too many undisclosed fees
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I know I'm bumping an old topic, but I'm just curious as to which area of Toronto you bought your condo in? Also, I just realized you said your condo fees are $400 per month. That seems absurdly low unless your condo is like less than 600 square feet.
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How the fuck do you have so much money lmao

green dragon posted...

How the fuck do you have so much money lmao

Software developer pays well
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Tc is a software dev?

GameReviews posted...

which area of Toronto you bought your condo in?

How do I answer this while keeping some sort of anonymity with where it'll be lol about a 15 min drive from Yorkdale. The condo fees are an estimate, they don't include the mortgage.

green dragon posted...

Tc is a software dev?

Construction. Get into the trades, bro. I wish I was working in film and television, though
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I keep looking at condos, but in this market (in my city) I don't know how I'd ever make money on it.

Regina grossly overbuilt condos while the oil prices were sky high. I remember most of them going for roughly $300-325k. Now they are begging people to buy them at closer to $250k by throwing in all kinds of incentives.

But man, even in "normal" circumstances, you're looking at around $200/month in property taxes and $200-300/month in condo fees. So that's up to $500/month in just fees, before you ever get to your mortgage. My rent is only $800/month. It's really hard to justify buying in this scenario.

Especially when I don't believe the value of the condo (or even a house right now) will outpace what I'd be paying in interest on the mortgage.
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