Dear Urbaneer: How Can I Be Smart About My Condominium Wish List?

Dear Urbaneer, Real Estate

Welcome to this month’s installment of Dear Urbaneer, where I take on tough real estate questions put to me by my readers. This time I am helping a prospective condo buyer who is own the process of building her wish list and beginning her search. She wonders what elements she should look for to give her the best options to lure tenants if she chooses to rent, support asset growth when it is time to sell – as well as fulfil her own particular desires should she use it as a pied-a-terre in the future! Read on, to discover 10 factors worth considering when making your wish list (that many people miss)!

 


 

Dear Urbaneer:

As I begin my condo search, I’m looking at my must-haves for my eventual downtown purchase, which will initially serve as an investment rental property but may one day be a pied-a-terre for myself. Beyond the obvious desirable criteria, like a well-designed layout, great location and the amenities I favour, what else should I think about? Are there other features that I may have overlooked that will enhance my lifestyle and help grow my investment – or that would be most appealing to future buyers or possible tenants?

Signed,

Seeking A Smart Condo Purchase

Here is my reply:

Dear Smart Purchase:

As I often say, knowledge is most definitely power when it comes to real estate. By doing thorough due diligence during your dwell hunt, and by making your wish list comprehensive and detailed, you are most likely to end up with a property that will provide you with the lifestyle you seek and the asset growth you hope for.

With so many possibilities and considerations, there is a lot to take in. Here are some tips on how to fully build your wish list, particularly factors that you may not have considered.

 

 

Assess Your Goal

There are a wide variety of features and amenities available for condo dwellers, but before you make your wish list, consider what your goals are. Is this home for you to live in, or for rental purposes – or maybe both? What is your timeline? Is this a long-term purchase or are you using this as a stepping stone to move up the property ladder?

Often the same amenities that appeal to you will appeal to renters (like a great location or intelligent floor plan, for instance).

Something to note: if you are approaching your purchase as an investor, it is risky to determine your purchase price predicated on future or potential value. Rather, consider the ‘tried and true’ proven fundamental of cash flow from income. It’s wise to put forth a solid down payment and attempt to get the home you purchase to carry. If there is a shortfall, make it a sum that you feel comfortable you can always cover (like, say $5000 a year).

Identifying what your goal is in purchasing a condo will in turn assist with deciding what attributes you desire most, and what attributes will make a particular condominium appealing to future buyers. Having a clear goal is essential in prioritizing your must-haves and securing a home that best suits you today – and tomorrow too!

 

 

 

The Condo Market & COVD-19

The condominium market sputtered during the pandemic, with much of the demand halted because of travel restrictions, a ‘full-stop’ on immigration, post-secondary school going online, and enacted rules concerning Airbnb rentals. However, with borders reopening and our population largely being vaccinated, the market is a-flowing again with demand swelling.

Here was my prognostication last year –  ‘An Overview Of The 2020 Toronto Condo Market And What Lies Ahead: Part One and Part Two.’ Much of what I indicated in this piece is happening now! Now, with the benefit of time, I offer more context for the current market with tips for a smart purchase.

 

 

*Image courtesy of RoomSketcher

 

Choose An Intelligent Layout

There are a few basic elements I always recommend when buying a condo, many of which hinge on the unique to help your unit stand out in the minds of future buyers (more on this later!)

At the top of the list is a well-designed layout –  aesthetically (which can be changed) and functionally (which cannot).  If you’re looking for a two-bedroom, you’ll likely want to look at split-plans, with the bedrooms on opposite sides of the suite. This is favoured because it provides much appreciated privacy form guests and roommates. Also, how about a kitchen with the coveted ‘essential triangle’ of a well-placed stove, fridge and sink?

Decide for yourself if you’re someone who requires light in your bedroom and therefore having the primary bedroom on an exterior wall with an operable window is essential. Some folks don’t mind the bedroom alcove tucked deeper in the suite and often without an operable window – particularly if they love to nap, work nights, or treasure sleep-ins on weekday mornings!

Units with balconies are desirable. One of the lessons learned throughout the pandemic is the untold value of outdoor space right at home. A sweet terrace or balcony has always been a plus in a unit, but now this carries even more weight, whether for your own use, for renters, or for future buyers.  I’ve been documenting The Increased Desire For Outdoor Space In Toronto Condos During The Covid-19 Pandemic. This is also true in  Dear Urbaneer: What Is The Value Of A Condominium Balcony Or Terrace?

Remember outdoor space is an extension of indoor living space. Having large windows to connect the outdoor area without dividing the space is ideal – as is having a protected panoramic view.

Also desirable features in a unit are elevated or custom finishes, or other rarer to market features – like high ceilings, expansive windows, or the hard or soft loft aesthetic! –> here’s our post About Vintage Brick & Beam Factory Conversions & Concrete ‘N Cool Contemporary Lofts In Toronto.

 

 

Choose Your Amenities Wisely

If you are occupying the unit, think about your lifestyle and what amenities would support it best. Would it be convenient to be able use a gym at home? How about an outdoor pool? It would be heaven in the summer, but would an indoor pool serve you better for a larger portion of the year? Do you work at home and need a workspace to use – like a condo meeting room? 

There has been an increase in the type, level and sophistication of common amenities at condo buildings, particularly over the past decade, but they do come with a price tag attached. Take a hard look at what amenities you really need and want so you don’t end up paying extra for things that you likely wouldn’t use. Similarly, some of the blingiest amenities are in larger buildings (a topic with implications for your purchase that I explore further below). Do you really need a virtual golf room? How about that huge theatre room (or will your living room be sufficient)? Important questions to consider!

By the same token, tried-and-true amenities that are always popular (both for renters and future buyers) are storage, parking, onsite green space (or green space-handy), pet-friendly amenities like dog washes, co-working spaces and outdoor kitchen areas. These are the essentials that will always appeal to the widest cross-section of potential buyers and renters.

 

 

*Image courtesy of the Globe & Mail, with thanks.

 

Low & Mid-Rise Boutique Buildings Are Typically More Desirable Than Huge High-Rises

Now that Canada has nearly weathered the full onslaught of COVID-19, it’s been made apparent that a contagion situation can be exacerbated by the number of residents in a building, including riding the elevators and using common elements. Suites that are closer to ground-level and accessible by a few flights of stairs quickly became much more coveted than those on higher floors. Some might consider this a moot point now, but the scientific community tells us that this is not the last we’ve seen of COVID – or other airborne viruses.

After all, should the virus mutate and return in a new incarnation – or the vaccine doesn’t protect us from all the potential issues as discussed by Canada’s Immunity Task Force on CBC – it will only exacerbate the perception that high-density housing is riskier.

So – be forward-thinking and cautious by taking into consideration how different condominiums will be viewed if the virus were to impact us for longer than anticipated or re-emerge.

 

 

*Image courtesy of CondoEssentials, with thanks.

 

It’s Important To Assess When The Building Was Built & By Whom

It’s not just your unit that you must consider; assess the building as a whole – its age and the reputation of the company that built it.

For a crash course about all the high-rise towers built in the 2000’s, check out this tell-all documentary on CBC’s Doc Zone called The Condo Game. This documentary explains how a prominent number of condo towers constructed as production housing for profit – a la ‘CityPlace’ – were developed over two decades. These investment vehicles were constructed cheaply and have been used mostly as rental units, so the buildings tend not to be as well-maintained or upgraded (though they are legally required to follow the protocol of the Condominium Act 1998 with updates underway since 2012).

The credibility of the developer is important too. Even though each project is developed as an independent numbered company, it’s still under the umbrella of a Development Corporation that should be fostering goodwill and a solid reputation. Tridel has a long history of building good products, whereas Urbancorp who went bankrupt in 2016, had a history of constructing crappy shelter. In fact, many Urbancorp buildings have been blacklisted by mortgage insurance firms like CMHC and GenWorth Financial, meaning high-ratio buyers with less than 20 percent down can’t buy the condos they built.

 

 

 

Who Is Your Competition?

When it comes time to sell your unit, who are you up against? Before you buy, sleuth out the level of potential competition.

Looking at buildings as a whole, it’s important to be cognizant of the number of suites, and their unit mix, particularly in a large condominium building. The more suites there are of a similar size, layout, and condition in a tower, the more prone a seller’s unit can be to value fluctuations.

For example, if a 30-storey complex has ten suites per floor, and four of them are one bed + den layouts and you purchase one, your future market value is dependent on the most motivated of sellers of the other 119 units at any given time. This can serve you well when negotiating a purchase but be more problematic when selling.

When purchasing a unit in a larger complex, I recommend buying the units which have more desirable qualities (like those I listed above. Think unobstructed protected view, a good aspect for natural light, a terrace (some units on lower floors will have terraces on top of a podium portion of a tower), or an intelligent layout.

Also, there can be the benefit of purchasing a unit that has been substantially upgraded or one that is tired and ready for elevation, if either has been priced at a discount due to a seller’s motivation –> Dear Urbaneer: How Do I Boost The Value Of My Condominium?.

But also look beyond, into the neighbourhood that you’ve chosen. What other buildings could tempt potential renters or buyers? What features do they have that might be considered more or less desirable?

 

 

 

The Risks Of Buying In High-Density Towers (And  Assess The Number Of Owner-Occupied Units!)

For the last decade, I have cautioned against what could be the Achilles Heel in Toronto’s hot housing market- those high-rise density towers. Units have typically been held largely by investors, which means, if there was something significant to impact the market and motivate investors to sell, there could be a fast and precipitous drop in values.

Enter COVID-19 and the early days of the pandemic… And that’s precisely what happened (as I spoke about above, from a health perspective).  

But now let’s consider it from a landlord/rental income perspective. During the pandemic, it was small units in point towers that sat vacant and dropped the most in value before they recovered. Units like this have historically been largely investor-owned.

So what happened? It was in part because of the City of Toronto’s new policy restrictions on Airbnb (now limited to owner-occupied units as explained in my Dear Urbaneer: So Why Are There New Airbnb Regulations For Toronto? ), and because these buildings had higher incidences of COVID-19.

Incidentally, did you know there are around 400 of these towers in the original City of Toronto? Check out this great Globe article from 2017 that documents 5 decades of condo growth in 5 map photos, plus view the 3-minute video (with dramatic music!) on Toronto Storeys  (created by Point2Homes ) that shows “the evolution of the Toronto skyline starting in 2005 to 2019 and beyond“.

Look for buildings that have a higher percentage of owners versus tenants. Even if you’re looking to invest in property rather than occupy it, I recommend purchasing in a building that has a greater percentage of owners to tenants, as owners are more invested in the day-to-day maintenance (pride of ownership), their tenure is less transient (which means fewer units come to market for sale), and they are more likely to be committed to community-building.

Certificate disclosure on the number of units that are rented can be wildly inaccurate. However, this information isn’t easily accessible unless you have a copy of the condo corporation’s Status Certificate which costs $100 to purchase. It would be part of your due diligence to review the Status Certificate before making your purchase firm and binding but we may not be able to determine the ratio of owners to renters easily prior to making an offer. I typically find it takes about a week for a property management company to respond to most any inquiry about a building.

 

 

 

Hone In On The Best Location

You’ve heard the mantra “location, location, location”? This is because proximity to lifestyle-enhancing amenities remains a key component of maintaining and growing your investment’s asset value.  It’s also going to factor into your quality of life, should you be occupying the unit.

It is important to note that in the context of the pandemic, what are considered necessary and enjoyable amenities close to home have shifted during the pandemic.

First, I’ve long counseled clients to consider purchasing condominiums in neighbourhood settings where there are fewer buildings, and in particular, those located along the Main Streets of Toronto’s urban villages. Established neighbourhoods or central locations with architectural interest remain limited, which means you’re more likely to protect the value of your condominium when the likelihood of direct competition is diminished.

That’s not to say one shouldn’t purchase in communities where there are larger concentrations of high-density housing, but it’s important to recognize that the resale value of any condominium is dependent on the number of comparable properties for sale in proximity to yours.

Right now, when it comes to amenities in proximity to a building, at the top of buyers’ lists are retailers that sell what’s essential, like food, libations, and home necessities for utility and decor. I’ve also found that proximity to bike lanes and cycling paths, and expansive public green spaces with off-leash dog zones, outdoor farmer’s markets, and natural eco-systems where it’s easy and accessible to get away from the maddening crowds, is more on the radar of buyers than pre-pandemic.

 

 

 

Seek Out Energy Efficient Buildings

Energy efficiency is top of mind for homeowners across the board these days as buyers become more socially conscious. As such, having this as a feature is of benefit both to lure future buyers and to enhance your lifestyle as a homeowner. After all, your home figures largely into your health. (Have you read my Healthy Home series?)

Look for things like low VOC paints, sustainable materials and décor, high efficiency heating and cooling systems, eco-friendly windows to enhance the building envelope, low-flow fixtures and energy efficient appliances.

Also look for roof gardens, vegetative roofs and water systems that utilise rainwater. In parking garages, look for EV chargers and carbon monoxide detectors that will activate exhaust fans only when needed.

Condo corps that demonstrate consistent strategies to reduce water and energy use display a consciousness that is sought after by environmentally-conscious buyers, which is becoming more prevalent on house hunting wish lists.

 

 

 

Family-Friendly Features

For reasons of affordability and a growing desire for the conveniences of urban living, condominiums are becoming more and more popular with families. Given the rise in this particular demographic, developers are now catering to this market with a suite of amenities meant to enrich family life.

If this is something that might figure into your needs as a homeowner (current or future), then it is worth sourcing out these types of specific amenity offerings. Similarly, if you are targeting this particular market from a rental perspective, it is worth investigating buildings with these types of amenities.

Most popular are things like dedicated outdoor space with kid-friendly equipment, child-friendly splash pools, gyms (with basketball courts etc., perfect for running around and free play), afterschool programming, communal BBQs, jungle gyms and more.

This recent National Post article, “Designing Condos For Kids”, talks about how creating onsite daycare in new condo developments is becoming an appealing feature for families.

Here’s my past post on family-friendly condos: Dear Urbaneer: Should We Raise Our Kid In A Condo?

 

I have no doubt that with the right wish list and proper considerations (and research!) your realtor of choice will assist you in finding a fab unit that will serve you well in both the short term and long term! And, of course, the Urbaneer Team welcome being of service!

 


 

Here’s a stellar loft that can give you some great ideas for things you didn’t even know you WANTED on your wish list! Available right now for lease, this space offers the ideal trifecta of location, style and value!

Looking for a heart-grabbing vintage brick and beam loft to lease? Here’s a great St. Lawrence Market offering for lease that perfect for the savvy urbanite who loves the hard loft look: A Vintage Loft, Steps To St. Lawrence Market!

How would you love to rent a crunchy n’ cool space in a Heritage Building with 1058 square feet of living space spread over two levels?! This 2-bedroom vintage loft is ‘industrial chic’ at its best! Offered for lease at $2999/Month!

 

 

Contact James Ormston at james@urbaneer.com for more information or to book a private viewing!

 


 

Given that we are talking about wish lists today, I always find that flexible or multi-use properties offer the most opportunity but in function and resale value. For example, our recently sold listing at 91 Glendonwynne was an exceptional buy because it could be tailored to your needs: Investment Property, Co-Ownership Opportunity, or Multi-Generational Home!

A Stately Purpose-Built Duplex With Lower Level Suite, Steps To High Park’

This classic, all brick, 2-storey detached Edwardian residence possesses all the charisma of hard-to-find vintage properties, but has been thoughtfully modernized to accommodate today’s busy urban lifestyle and new models of family living! Handsomely restored and renovated!

Walking out the front door of this property, it’s less than 7 minutes to over 400 shops, restaurants, and services in the Bloor West Village BIA, as well as the Runnymede Subway Station, the Runnymede Branch of the Toronto Public Library, Runnymede Public School, and High Park!!

 

 

 

 


 

The smart buy is the prudent buy, based on research and advice from someone who understands real estate strategy holistically. It’s about servicing your goals for today and tomorrow too. Might my team and I be of assistance on your dwell hunt? We are here to help!

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