A few days ago, we discussed the big misconception that the majority of Toronto pre-construction buyers are ‘foreign investors‘.
Here’s another interesting fact, based on our experience – there are more people in the suburbs investing in Toronto condos than in the city itself – typically living in detached homes in the 905 area.
So it comes at no surprise when we work with first-time condo investors who say:
“That unit is so small! I could NEVER live in that condo!”
My favourite line that a client once said was, “I have a walk-in closet bigger than that condo!”
When it comes to condo investing, one of the biggest mistakes first-time investors make is assuming they are the demographic for condo living, or assuming that there isn’t a market for small condos.
Let me spill the beans – there is a HUGE market for small condos.
The typical condo dweller of a ‘small’ space isn’t a married couple with 2 children. They are:
- Young, single professionals working downtown
- New immigrants to the city (especially coming from countries where they are used to smaller living spaces)
- Empty nesters downsizing from their large homes or using the suite as a pied-a-terre
- Students attending post-secondary education
The list goes on an on. The point is that there is a huge demand for these spaces. Never assume that someone won’t live in a space because it is too small for you!
We have clients with studio units under 400sqft earning incredible rental income. For example – there are studio units in the Paintbox project on Dundas Street East in the heart of Regent Park, 392 sqft, earning $1375/month in rental income!
These suites are often used like hotel rooms – a place to sleep at night. Many of these residents barely use the appliances, typically eat out, and come home to lay their head.
BOTTOM LINE – Unless you live downtown in a condo, you are not the condo demographic. Do not choose an investment property based on what you would want, base it on what the market would want.
(Want more great info on pre-construction condo investing? Download a free copy of our latest book, Condo Investing 101)