The label “condo investor” is a common-place term found among today’s newspapers and media articles on the Canadian housing industry. But who are these condo investors and what is their motivation? This special guest post is from someone within the condo community that will provide a little insight into both questions. Sayra Bidani is CEO at Condominiums.ca and a licensed Toronto Realtor with Remax Crossroads Realty Inc.
There has been much discussion lately on what percentage of Toronto condo buyers are investors. The Senior VP of Tridel Group of Companies has it pegged somewhere along the lines of 15%, while other stats have portrayed it as high as the 60% mark. Just who are these condo investors? From my experience, condo investors are not just millionaires from Hong Kong or the Middle East as some might assume, but middle-income families from this great city are seeing the opportunity in the Toronto condo market as well and are no longer sitting on the sidelines. The economy has produced a wealth of entrepreneurs, and both full and part time workers no longer expect the kind of pension that was given to the previous generations. Projections show that the next generation will likely see a large increase in part time work with no benefits available. Scary thought for some, but motivation for others to take charge of their nest egg. I’ve had many forward-thinking clients purchase condos, not only to help provide for their retirement with rental income, but with the intent of passing them on to their children when they become of age. For them it’s about giving their children a head start in what could be a tough economy when their time to work comes. The beauty of real estate investing in Canada is it stands the test of time. It’s tangible; you can see it, touch it, and rent or sell it on your timetable. It won’t become completely worthless like many stocks which become delisted from the stock exchange, or see shareholder value diluted beyond repair. Real estate is a business, and thus by owning and renting out condo units you are in the property management business. Not only would you be handing down a condo to your child or children, you will be handing down a business. It’s better to teach a man to fish than feed him for a day, as the saying goes.
The goal to investing should be smart investing. Identify your motivation. Is it a 5, 10 or 20 year plan? Do you want to be a hands-on landlord or are you looking for a quick flip? Have you met with a real estate professional who can provide knowledgeable investment opportunities? Have you met with a mortgage or financial planner who can help you realize what you would be comfortable spending and what would work for your long term goals? These questions need to be answered to put the smart in your investing.