Are you a buyer or an investor? The answer should be: Both!
Whether you’re looking for a place to live or looking to make money, a condo is a great purchase that has proven to have strong returns, whether you’re buying a condo as an investment or buying a condo as your home.
So which scenario fits you: First-time buyer, property ladder, assigning investor or investor-turned-landlord?
First-time condo buyer
This is your first big purchase. Maybe you dream of owning a house one day, maybe you’re just realizing that buying a condo is better than renting a condo and paying someone else’s mortgage. Maybe you just want to be free of landlords and have a space of your own to do with as you please. Now there is even more opportunities for first-time homebuyers to get into the housing market. One of these is the Government’s new first-time homebuyer assistance program. Some purchasers may now be able to own a home with as little as a 2.5% down payment with assistance through a 5-year interest-free loan! Learn more about the Government’s first-time homebuyer down payment assistance program here. Another Government first-time home buyer’s program implemented in 2016 has reduced or eliminated the burden of property transfer taxes for eligible buyers. Learn more about these tax exemptions and who can qualify here.
Welcome to the property ladder
Regardless of the fact that you’re living in it, your condo is an investment. Its value is increasing – that appreciation starts from the day you buy. The earlier in the project development you buy, the better your return, every year you live there the equity grows. According to the Royal LePage House Price Survey in April, 2016, condos increased in value by 9.5% in the first quarter of 2016 alone (What other investment offers that?). After a few years, you’ve likely had a few raises at work and you can afford a bigger mortgage, and the equity you’ve built in your condo can help you move up, whether you’ve got your eye on a larger condo, townhome or even a house.
The assigning condo investor
If you’re looking for a solid investment, there is, historically in major markets, a fairly reliable increase between pre-construction pricing and the final suite pricing once the condo is built and ready to be lived in. Many investors see this increase as the goal. They may try to sell – called assigning – without ever living in the condo or even getting a mortgage. They sell the brand new condo suite to the end user with the strategy that the increased value over the couple of years the condo is under construction is a great return. For a fairly small down payment – the only money you ever put into the purchase – you end up with a sizeable return.
The condo investor-turned-landlord
The long-term investor closes on the condo, but may never move in. Instead, with Vancouver’s rents being what they are, they rent out the condo and let their tenants pay the mortgage, the maintenance fees, and likely still have something left over for upkeep and income – which can be used to buy the next investment. This can also be a strategy when it’s time to move if you’re in the position that you can borrow against your condo’s equity or you have significant savings and don’t need to sell to finance your next home purchase.
Article Sourced From: TheWex.ca