Whether you’re an investor or a buyer that seeks to reside in the new place, one of the questions is what do you buy, the main choice being between a condo and a house.
There is no one clear cut answer to satisfy all buyers, of course, hence the different decisions people make. The truth is there’s no good and bad choice here either. Rather, the thing to consider is which choice is right for you and your current state of financial circumstances.
Let’s take a look at the differences between those two properties.
In terms of long term investment and price growth, a detached house is still the higher yield investment. Toronto’s real estate market shows that detached properties are far ahead of condos in price growth.
The reason is pretty simple, it’s the ages old rule of supply and demand. Condos are being built in Toronto and houses aren’t. New houses are build way outside of city limits where there’s still land to use for them. In dense urban areas, however, no builder in their right mind will prefer to build a set of houses where a 30-storey high rise tower can be created. The result is that houses are in short supply, so if you are looking for a long term investment, they are the way to go. At the same time, if you are not looking to invest but just to live in a place of your own, a condo is perhaps the better option.
When they move into a house, many people find themselves spending so much on it on a regular basis that it turns out unaffordable for them. If those ongoing expenses are not factored into your budget ahead of time, you are very likely stepping into a similar situation. Roofs, windows and other things around a house require regular repairs; hedges need trimming, furnaces have to be maintained and so on. In a condo all you have is condo fees and hydro payments. Budgeting for it is far easier this way.
Home insurance is something you’ll need regardless of which type of living you choose, but the cost of the insurance will differ drastically between a house and condo. This is mainly due to weather related risks that a condo is mostly safe from. Even flooding and fire in a condo are likely covered in the condo fee, costing you nothing extra. Oh, and closing costs differ as well for condos and houses.
Many people who buy a house or condo don’t realize they are buying into a lifestyle. In a condo you are living in a gilded cage with strict rules. Your common areas are cleaned, parking is free of snow, but you can’t go out into a back yard and have a BBQ with your family. Then again, to enjoy the beauty of a back yard and no neighbors above your head, you need to be prepared to shovel some snow and leaves and do other work a condo dweller is exempt from.
Ready to decide? Want to know more? Get in touch with us and we’ll give you a better perspective of your options in the Toronto real estate market.