Toronto currently has a very dynamic real estate market with opportunities for investment throughout the city, compared to other international cities Toronto’s average per square foot cost of condos is considerably less at $750/psf.
Compared to New York at $1,600/psf, and $1,000/psf in Vancouver, Toronto has plenty of room for healthy growth.
When deciding to invest in the Toronto real estate market one must decide on their investment goals.
Example goals would include: (1) Receive a stable cash flow and slowly pay down a mortgage (2) Focus on equity growth and avoid having a mortgage.
If you were interested in achieving a stable cash flow you might consider investing in a residential resale condominium, working with a professional real estate agent you could get a solid understanding of what expenses are associated with your investment.
Some potential expenses include: maintenance fees, property taxes, mortgage/debt payments, and landlord insurance.
Your potential profit stream would come from rental income usually paid out in post dated cheques.
According to fleurcondos60shuter one of those investment opportunities is fleur condos, located in down town Toronto, Canada.
To evaluate your investment and compare it to others in the marketplace, your real estate advisor can determine what the capitalization rate is.
The cap rate is determined by taking the yearly profit and subtracting expenses (but not subtracting debt servicing) then dividing by the list price of your investment and multiplying by 100.
This calculation will give you a percentage which represents the yearly return on your investment; once you have performed this calculation for several investments you are considering it will be easy to compare them side by side.
If you were interested in focusing mostly on equity growth you would want to consider a new construction purchase in either the condominium market or the housing market.
In either situation new construction purchases require you to make deposits in a stagnated fashion, usually around 20% broken up into 5 or more payments, after you sign the purchase contract and start making your deposit payments you are not required to pay any other fees, including mortgage, insurance, and maintenance until the property is constructed which could take anywhere from 2 to 5 years.
New construction investments allow you to own property without the burden of any monthly expenses.
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