In dense urban cities like Toronto, square footage comes at a premium. While many homeowners aspire to own a detached house one day, they aren’t always the best pieces of real estate to invest in. Not only are detached homes priced prohibitively for many, but they also don’t always suit the immediate needs of all homeowners.
For most singles, couples, and real estate investors, the smarter real estate investments tend to be smaller properties, especially if they value living downtown. That’s why condo and townhouse markets in larger cities like Toronto perennially drive a lot of demand.
However, condos and townhouses are not one and the same, and certainly, hold contrasting long-term investment values for different buyers. But how do you know which type of property is the better investment for you?
Here are a few points you should consider ahead of your next real estate investment.
What’s Your Lifestyle Like?
While most conversations about making smart investments tend to surround monetary value and appreciation rates, it’s also important to consider the lifestyle aspect of investing too.
Money aside, making a smart real estate investment also depends on your own personal benefit and long-term use of the property as well. A large home with lots of square footage that requires plenty of upkeep doesn’t function as well for a single person as it would a family. Similarly, a condo downtown with limited outdoor space doesn’t work as well for a growing family as a house with a big backyard would.
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You have to ask yourself what poses the best fit for your lifestyle when considering which type of property makes a better long-term investment. At the end of the day, if you plan on actually living in the home, you’ll have some lifestyle needs that should consider before your financial ROI.
Conversely, if you plan on renting out your new home, it always pays to put some careful consideration into who your target renter demographic is and what type of home would appeal more to them before making your investment.
In a city as large as Toronto, new properties pop up for sale all the time. Have a look through the latest homes for sale by visiting Our Featured Listings here.
The Pros Of Condos
For those who enjoy living the fast-paced and exciting city life, condos are often the most desirable type of property to live in. Due to the relatively small footprint of individual units, condos often offer their residents much closer proximity to densely populated urban areas.
Condo buildings are seemingly always popping up directly downtown near shops, restaurants, cafes, nightlife, and other public amenities, whereas the selection of townhouses is often much smaller. In addition, condos see a high upturn in value should the neighbourhood they’re based in become more covetable over time, meaning you could turn a tidy profit should your unit appreciate in price.
Speaking of amenities, most modern condo buildings also offer their residents a selection of attractive amenities, often including things like a gym, a pool, a social room, or other recreational features. From an investment perspective, these amenities mean condo owners save on gym, fitness, or social club memberships as well.
Another added benefit of condos is their security — most condos have well-thought-out security measures in place, along with doormen, concierges, and security guards keeping watch of who comes in and out of the building.
One more important thing to mention is that any necessary repairs or maintenance costs are often facilitated and paid for by the condo association itself rather than out of the pocket of the owner. Obviously, this means owners never really have to feel stressed about any potential damages and are able to save on repair costs.
Do you have your heart set on buying a condo in Toronto? Here’s what you need to know ahead of time:
The Cons Of Condos
While these amenities, security guards, and maintenance employees are all very nice to have around when living in a condo, they also don’t come free. One downside of investing in a condo is that you’ll be expected to pay monthly fees to the condo association in order to cover these costs.
Along with that, condo owners also have to live with having less privacy in general. Depending on which unit in a building you might own, you could have neighbours on almost every side of you. Whether or not you get along with them is a risk condo owners take when investing in the unit, and can sometimes prove to be more of a long-term headache than anything else.
Ready to cash in on your condo investment? Put some thought into whether you should list or lease while reading this: Should You Sell Or Lease Your Condo
The Pros Of Townhouses
The biggest advantage of living in a townhouse over a condo is definitely the added space. Most townhouses tend to have multiple floors as well as many more outdoor areas, from decks and patios to front and back yards.
Unlike condos, the added square footage and modestly-sized outdoor spaces of townhouses mean couples and growing families don’t need to worry about feeling cramped anytime soon.
The larger footprint also means privacy is much better in townhouses, as there are fewer neighbours to look out for and more space to sprawl out in.
As far as monthly association fees go, they don’t always apply to townhouses as they do condos either. While some townhouses are part of an association and charge these recurring fees, not all townhouses operate that way, meaning it’s not a given you’ll have to end up paying for certain things you don’t want to.
Eager to make your next investment in real estate? Use these links below as your starting off point:
The Cons Of Townhouses
Because townhouses require more square footage, they traditionally aren’t located as close to downtown cores as condos can be. While this might be a plus for some, it’s definitely less convenient for homeowners in terms of proximity to amenities.
Speaking of amenities, townhouse owners also don’t get to enjoy the perks of having things like a pool, gym, or common room included in the cost of their home. Similarly, the same sentiment applies to security systems and guards — townhouse owners have to practice their own safety measures.
If you’re not all that into regular home maintenance chores, investing in a townhouse might not be a good fit for you either. Unlike a condo, you’ll be tasked with doing things like mowing your lawn, raking leaves, shoveling snow off of your driveway and sidewalk, and taking out your own garbage.
Additionally, any larger-scale maintenance or repair work that needs to be done is your responsibility to complete, along with you needing to foot the bill.
The Better Investment
While both condos and townhouses pose different benefits and negatives depending on who you are and what your lifestyle is like, we tend to veer in favour of condos out of the two choices.
Not only are they easier for their occupants to live in, but they’re also easier for investors to use as income properties as they require less upkeep and maintenance over time.
Additionally, the fact that the value of condos often tends to rise quicker than townhouses makes for a better investment too. Because condos are typically based in more urban-centred locations, they’re more likely to develop further, boosting the property values of their condo units.
Want to keep expanding your knowledge about real estate investing? Let these related links help out!
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