When it comes to understand Condo’s their is no one better in Canada then Ben Myers who is the SVP Research & Analytics at Fortress Real Development. Our feeling is that 2017 is going to be a great year to own Real Estate with speculation that Condos will bring 10%+ returns. There have been a lot of talk about a slow down but no talk about supply meeting demand. To answer some of these questions Investment-Property.co and Jared Gardner Sales Representative for RE/MAX Professionals Interviewed the famous Ben Myers of Fortress Real Development,.
JG – 1. Why do you feel Condos are a great investment? Do you feel Condos will continue to appreciate in value in 2017 the way they performed in 2016?
Buying high-rise condominiums in the pre-construction phase of development can be a good investment if you’re prepared to be a long-term hold and rent investor, and are willing to make the time and effort to be a landlord. It is of the upmost importance to really study the market, the unit types, the prices, the developer and the location to make sure you are maximizing your investment. It is essential to have a knowledgeable Realtor, mortgage broker and accountant to advise you.
I don’t anticipate condo prices rising 15% again in 2017. There are more completions scheduled this year compared to last year, and the new mortgage rules will likely result in a more people saving longer for their ideal unit. However, this should result in further strength in the rental market. However, I do expect double-digit growth.
JG – 2. In your opinion what are the benefits and negatives to purchasing a New Build Condo vs a ReSale Condo?
Buying a new build condo allows you to take advantage of price appreciation in the market without having a mortgage, but also requires a larger down payment than resale. A new build has the latest features and finishes and is under warranty, which is nice to have to protect you from the costs of things that break down in your suite. Another advantage is that maintenance fees are often lower during the first couple a years after a project launches than the market overall.
A disadvantage is long interim occupancy periods that prevent an investor from paying down their mortgage, which is especially important when rates are as low as they are right now.
JG – 3. What area(s) do you recommend will be the hot spots to purchase a resale or new build condo in 2017+ ?
I would look at areas that have access to transit that are being underserved for condo projects. The success of mid-rise developments on Kingston Road and the Danforth in east Toronto and south Scarborough in 2016 are perfect examples of areas that were long-neglected for condominium product, but had pent-up demand. Millennials living in mega-towers downtown will want more boutique projects, that come with more of a neighbourhood feel.
Take a look at Dupont, Davenport, Dundas West, the Junction, and 905-area projects near GO Stations or with water views.
JG 4. – How much money would you recommend an investors to put aside for unknown closing costs ?What hidden costs should a first time investor be aware of?
BM – This is a questions for an experienced Realtor that has worked with investors and builders.
JG 5. – What do you look for in a builder?
BM – Completed projects, and/or experience from the senior management team. Go visit one of their completed projects; do some online research to see how long it took them to complete the developments.
Ben Myers, SVP Market Research & Analytics, Fortress Real Development https://fortressrealdevelopments.com
Jared Gardner; Sales Representative RE/MAX Professionals www.jaredgardner.ca 647-338-4475