This is one of the most common discussions between investors. Besides the obvious considerations such as purchase price point, down payment size etc. You should be asking yourself what kind of investor am I? A “hands on” or “hands off” investor, or in other words how involved you wish to be once you become a landlord. A condo is far easier to operate and maintain.
A condo would usually be a newer unit with less wear and tear and a management company at your service. Major expenses like gardening, roof repairs and other common elements will be covered by your monthly maintenance fee. But such a fee, while a friend, can be a real foe over the years as it creeps up, in an uncontrolled manner, eating up most, if not all of your positive cash flow.
In a house as an investment property, you will have more control over maintenance expenses but are exposed to bigger potential costly events like a leaky roof or a flood in the basement, oy vey! You will also be responsible for the garden and snow removal or a city inspector showing up unannounced. From a financial perspective a house would typically appreciate faster than a condo as the land it sits adds in value. Land is getting more and more scarce in our region, which is widely regarded as an “island”.
Finally finding tenants these days is an easier task and if rent is reasonably priced, perhaps equally probable for both options. If you must choose, ask yourself what you would be more comfortable owning and operating and if you can’t decide consult with an investment specialist or simply buy one of each.
Zvi Schichter – Salesperson, Forest Hill Real-Estate Inc – Brokerage
Managing Partner – Forest Hill Richmond Hill
zvi@schichterfinancial.ca (647) 557-7389
