Is now the right time to sell your Toronto condo investment?
Saturday Mar 06th, 2021
If you own a condo in Toronto as an investment and you are thinking of selling it, there are several factors you should consider.
Your Investment Goals
Think about your investment objective - are you looking for appreciation in value or cash flow? Your cash flow depends upon how much money you have invested, your mortgage payment, costs such as condo fees and property taxes and how much rent you are getting each month.
The current market conditions
Is it a buyers or sellers market? Are interest rates low? How is the supply and competition in the building, neighbourhood and other similarly sized condos for sale.
Trends in Prices and Sales
You should see if prices are going up or down and look at market trends in terms of the number of sales and how many days on average condos are taking to sell.
If there are many other condos for sale similar to your condo, buyers have more choice. If there are not many condos for sale, buyers will compete to buy your property.
Rental income & cash flow
Recently since 2020 rents have decreased rapidly in downtown Toronto by 10-20%. Any investor should closely look at the current rental rates to calculate the cash flow
Condo fees generally keep going up, somtimes they drop but not that often. Pay attention to increases in condo fees and property taxes as this will cut into your profits
Over time with tenants things wear down and need replacing and fixing. Make sure you budget some money for repairs and a new paint job every few years, especially when you are getting new tenants.|
What are your goals for the money invested? Is it long term or short term? Maybe you can sell the condo and re-invest that money to make a greater return than what you are getting now.
The key to having a successful sale is to be proactive. You can do this by knowing what your goals are with this property. Are you going to make a profit? Do not spend money on repairs which can lead to a loss on your profits. If you do not want to lose money, be sure to get a professional realtor to give you an unbiased value. Remember, you will not know what the market will do until it has actually happened - just look at the last year! Towards the end of 2020 there was a large supply of condos for sale. Already in early 2021 that supply is not less than half of what is was. Your property should be in good condition and priced accordingly. There are numerous methods to determine the value of your property.
The other key factor is to have a clear look at your competition. You can find this by looking online at other Toronto condos for sale, sold condos and ask your realtor.
Now that you are armed with the information, the next question is, do you want to do this? There are pros and cons of doing it yourself and hiring a professional. A professional will most likely sell your Toronto condo quicker and for more money. On the other hand, a pro will give you other services, such as marketing, advice, information and take care of the legal paperwork required. Your agent should also likely make sure no detail has been overlooked and will get all the sales information into your hands.
If you'd like a free condo evaluation visit: https://alexmoloney.com/free-condo-evaluation
Get a FREE copy of my Condo Seller's Guide: https://alexmoloney.com/condo-sellers-guide
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