Perfect Condo 1: the elusive the live-invest

Toronto Condos Toronto Lofts

Introducing the Live-Invest Hybrid Condo

Client: Dude, what’s the perfect condo?

Me: well, what is the purpose of your purchase?

Client: I want to live in it for a couple of years, and then I’d like to keep it as a rental and I want to make sure the rental income will cover my costs.

Me: ok, let me show you some numbers.

So, what my client wants is a home but also an investment. The main issue here is that most end-users – those who buy to live – tend to over-invest and spend too much money on units that will not make a positive return. Simply speaking, your rent won’t cover the monthly carrying costs (mortgage, condo fees and municipal taxes).

Anyone? McFly?

The main point here is the reasonable rent we can get for the condo. That’s it. To refresh, I wrote in Renting a Toronto Condo that Toronto Rentals are Small and Expensive and I still believe rents will come up within the next couple of years, because all the condos bought in 2005-2008 are more expensive and will require higher rents to cover up the monthly carrying costs.

We’re looking at $1500 to $1800/mo. for 600 to 900 sq. ft. condos, with luxury buildings at top locations with double that rate: 1 Bloor, Crystal Blu, Uptown, Casa, X, Couture, BSN – a 2-ed 2-bath on high floor with parking worth over half a million could fetch $2500 to $4000/mo.

What are the carrying costs per month for:

Results will vary with each specific building – and I’ll write a post on how to quickly calculate your monthly carrying costs – with this example, a $250,000 will run you $1,465/mo., a larger 700-er requires rent of approx $2,100 and a luxury unit should fetch $2,900/mo.

Looking forward to your calls and emails,

Yossi Kaplan, MBA
Sales Representative, Your Choice Realty Corp
885 Don Mills Rd suite 104

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