Buying property for low price then later selling it at a much higher value later is surely an attractive investment. Add to that the allure of living in a condo near the city and you can’t go wrong with investing in a condominium. With the rise of urbanization, owning a condo seems to be a next to the logical thing to owning a house. Also, the target market for condominiums, young professionals, retired people, small families, are the type of individuals with usually huge spending costs, so it is no question why investing in a condominium is that attractive for them.
But then some people believe that while condominium investments are good in the past, nowadays they are on the decline. According to a study by Macquarie Capital Markets Canada Ltd, real investment trusts (REITs) that own apartments are more profitable investments than condominiums. The study said that while condominiums have a 7.4% return on investment, REIT’s on the other hand have 21.4% — and that statistic is conducted in Toronto, one of the hottest places in the real estate industry.
Looking at it in a practical way, owning a condominium means owning a building together with a hundred of strangers, paying all the costs that needs to maintain it as long as the building stands. Owning a condo means having to worry about property taxes, monthly maintenance and other unforeseen costs, which could pose a burden to any owner.
Also, since condominiums are sprouting up everywhere, it would mean that the competition for these types of commodity will increase which will then consequently decrease its price, leaving you with a condo which value is lesser than what you have originally bought.
But condominiums are still less expensive than houses. They also offer a lot of benefits. Since they are closer to the city, living in condos enables the working class to save up on time and cost of transportation. It is much better to invest in a condo if you’re going to use it and enjoy some of its benefits for quite some time before selling it.
Sure, condominiums provide you with the intangible — the lifestyle it provides and the comfort. Young professionals should have some money saved up before deciding to invest in a condo. In that way, they will have more legroom for other unforeseen expenses.
It also helps in viewing condominiums not as money making ventures but a place of living, primarily and making only that money-making part of it secondary. In that way, you may have lost some money selling your condo, but you have used and benefitted from it for quite some time now.