Have you ever looked out over the City of Toronto? Condos buildings are everywhere. 
New building construction can be seen from almost every vantage point. In fact, The Financial Post states that “overall in 2011, construction began on 106,700 units; up 17% from the year before”. WOW!
So who’s buying all these units? I suspect it’s mainly speculators looking to make money on the spread. (Difference between buying from the blueprint plans and then selling when the actual building is completed and registered). Then I guess some are sold to buyers who actually want to live there...but you too should be buying one of them – or two or three!
I still think, and finally now so do some economists that the Toronto condo market will slowly plateau (not fall) and that the system will absorb the excess supply that appears to have been building up. Again, in my opinion, builders have been developing the city based on expectations of investor/flipper purchasing...the greed of the speculator. To date, expectations have generally been met.
But, for the average investor simply looking to create a retirement or collage fund type of investment and increase their net worth, there are some great deals out there. Buying a condo for rental purposes rather than flipping/speculation is a great decision.
Good rental properties in the City are very hard to find; so buying a condo and renting it out really does make sense.
For instance; I was just reviewing a new 2 bedroom, 2 bathroom condo in Toronto selling for 275,000. With a 30% down-payment and interest at 3.5 %, a 25 year mortgage comes out to monthly payments of only $ 967.35 – and that includes LTV (loan to value) mortgage insurance. On this particular unit, monthly maintenance is $ 325, and taxes are $ 1,397 annually.
Your total monthly commitment would be approximately $ 1,400. Rental properties in the area are easily getting anywhere from $1500- $2300 plus utilities. Obviously, the closer to the core, the higher the selling price per square foot but, the higher the rental rates too.
Having someone else pay down your mortgage is almost like getting it for free. Consider this method of investing before you leave your hard earned cash in the bank or the stock market.
We all know that in the long term property values increase. Buying a condo now and renting it out over the next 5-10 years can turn out to be a significant return on investment.
Contact me through my or by telephone to explore this possibility.