When Renting a Condo Makes Sense

Renting a condo

Toronto real estate is having its hottest—and most reported on—spring and summer in approximately forever.  With the argument between purpose-built rental, private rental, and putting down that money to buy a place right this second raging in the papers, it’s harder to get a sense of when renting a condo—or buying—makes good sense for you.  So if you’re torn between hitting the real estate pages or the rental listings, here are some considerations to help you decide what’s best for you right now, right here.

When you balk at the cost of real estate

It’s the big one: Article after article through 2014 and 2015 have laid out how expensive real estate is getting in Toronto, with bidding wars and skyrocketing prices talked over in excruciating detail.  Find a handy online mortgage calculator or talk to your financial advisor about what sort of mortgage terms you’re eligible for with your projected down payment, and if they’re worse than what you can pay for monthly rent—which skips the condo fees, repair bills, and more—it might be in your best interests to renew the lease rather than buy.

Likewise, look at the price point for units in your neighbourhood of choice.  As sellers have got wind that it’s their market in Toronto right now, real estate prices have gone opportunistically up.  If the cost to buy in your neighbourhood outstrips the cost to rent there, prudent investments might be a better destination for the cash you’ve saved.

When you don’t have concrete plans for permanence

You don’t know whether you’ll stay at your company in a few years—or if they’ll transfer you for a stint at an international office.  You don’t know if you’ll stay single, childless, or at your current family size forever.  You don’t know if this neighbourhood is where you want to plant your permanent roots.

That’s when it’s time to hold off on buying a home.

One of the primary benefits of renting a home is its flexibility: If you need to pick up and move to another city, a bigger space, or another neighbourhood, it’s as simple as giving your legal notice and hitting the rental sites.  Selling a home is a much more complicated endeavour, and if your life still hasn’t set in shape in certain ways, it’s a simpler and much less expensive proposition to settle down before you physically settle down.

When you haven’t budgeted for the fine print

Buying and selling houses isn’t a fee-free, tax-free transaction, unfortunately.  When one buys or sells a property, some of that money goes to land transfer taxes, your real estate agent, your lawyer, home inspectors, and more.  If those necessaries of doing real estate business aren’t in your budget, it’s best to hold off—and not get hit with a bad surprise.

If you’re not prepared for maintenance

One of the best things about owning a home is you can do pretty much whatever you want to it, as long as that’s within city building codes and you don’t make the house fall down on your head.  And one of the best things about renting one is that if something starts trickling down toward your head parts, it’s not your financial responsibility to fix.

Home maintenance is an ongoing, lifelong responsibility, and it’s the kind of thing you want to do right: hire qualified contractors, make long-term decisions, use the best materials.  If you aren’t financially or emotionally prepared to sink time, money, and effort into keeping that home in great shape, this can produce a whole lot of stress and grief, and considerable life disruption.

If the thought of hiring roofers gives you hives, it might be best to stick to a rental situation, where any repairs land straight on your landlord’s desk.

Property taxes and insurance

Home ownership also comes with the question of insurance and property taxes.  If the property values in your neighbourhood go up—and Toronto’s property values don’t seem to be inclined to go down—that shows up in your property tax bill, if, unfortunately, not your pocketbook.  If you’re unsure you can carry the year-to-year load of property taxes and insurance on top of your other responsibilities, it might not be the right time to buy a home.

As your stern grandpa would say: A home is a responsibility.  The tradeoff we make for permanence and equity is a whole lot of financial juggling and the burden of making sure everything is legal and works right.  There’s no stigma in not being up for fitting that into a busy life just yet—or, bluntly, ever.  Consider the factors, make the decisions that work for you, and don’t look back.

Best of luck!

Renting a Condo vs Apartment

Quality condo appliances

The Condo Conundrum: What Renting a Condo Does for You (Renting a Condo vs Apartment)

More and more of Toronto’s rental housing is coming in the form of condominiums, for rent by private or corporate owners.  But aside from the name, what’s the difference between renting a condo vs apartment for your next move?

There are tangible differences between apartment rental and condominium rental to weigh when making your choice of applications.  Here are five factors to consider when asking whether a condominium rental is right for you.

  • Condominium buildings tend to be newer builds

Although with the new year—and UrbanCorp’s cancellation of two downtown condo projects in favour of building rental apartments—there’s been a decided shift back toward newly built apartment buildings, a Toronto condominium will generally be newer and built with more modern materials than an apartment building.

“Purpose-built apartment construction has been almost non-existent the last few decades across the GTA,” says the Toronto Star, and Shaun Hildebrand, vice-president of Urbanation, a research group specifically focused on the condominium industry, backs that up, saying that privately owned rental condos have soared to take up 99% of Toronto’s new rental supply.

What that means for you?  Rental condominiums are less likely to have the issues associated with building age: Wear and tear in common areas, occasional pest issues, water pipe corrosion, disruptive noise due to ongoing heavy maintenance, less efficient heating and ventilation systems, and more.

However, newer rental condominiums can lack some of the features of older trends in building design: The insulating brick and plaster of Toronto’s oldest rental stock provides less natural light than current glass-walled condominiums, but keeps the cold out—and heat in—like magic and ensures low hydro bills.

As well, there’s a sweet spot for condominium rental: It takes a new condo a few years to work the kinks out, construction-wise.  A condominium unit that’s less than three years old may be still discovering its maintenance problems, while slightly older units can usually be relied upon for the minimum of maintenance trouble.

  • Condominium rentals can bundle your utility bills

As discussed in previous posts here, one of the major draws of condominium living is that you can bundle your utility bills into easy-to-pay, easy-to-budget-for condo fees, set by the condo board to a fixed monthly rate.

While the words “utilities included” used to be standard in Toronto rental listings, with the advent of the provincial government’s smart meter legislation in 2007, rental apartments that pick up the hydro bill have all but vanished.  Instead, they’ve been replaced by individual unit meters that gauge your hydro usage individually.

If you’re a renter who’s dedicated to conserving hydro, the apartment option may be for you.  But if not—or if you worry about paying winter heating bills on a rental apartment you can’t personally reinsulate—the pooled resource of monthly condo fees, rolled into your rent, can be a great source for peace of mind.

  • Security matters

While apartment buildings with a security desk and weekend patrols are not uncommon, on the whole, condominium buildings have a consistently stronger game when it comes to security and front desk coverage.

The reasons are simple: Rental buildings, especially those owned as investment properties, won’t have the same stake in a good security presence that a condominium board made up of—and funded by—people who own units and live in the building will.  Condominium boards allow residents to set the security budget, and have a stronger motivation to allot the security presence that’s necessary for the neighbourhood they call home.

As well, an active and engaged security presence can be a massive help for in-building disputes.  A noisy party next door can be calmed down with one call to the front desk, rather than late-night hunting for a superintendent’s phone number—who may live offsite—or going directly to the police.

  • Building for ownership means quality appliances

While condominiums owned by investors make up a significant portion of the rental stock in downtown Toronto, they’re not built to rent—which means a higher quality, overall, of appliances.

Condominium kitchens are overwhelmingly more likely to come with new, energy-efficient, organized fridges; easy-to-clean glasstop stoves; and compact dishwashers, which don’t appear in any but the most luxurious apartment rentals.  This extends into the bathroom, where low-flow toilets and adjustable showerheads are increasingly common features.  As well as using less energy and water, newer appliances will perform better, cook more evenly, clean more easily, and give you infinitely fewer maintenance problems from day-to-day use.

Architectural design geared for ownership also means another vital perk: the majority of rental condos will provide ensuite laundry rooms.  There’s a significant savings in not having to hoard your quarters—or fill a chip card—to do laundry in a common laundry room or outside laundromat, and the convenience of a washer and dryer that’s always available, no matter what hour of the night, can turn an early-morning-meeting wardrobe emergency into a minor before-bed fix.

  • Maintenance with the pride of ownership

The most intangible—and most important—bonus to renting in a condominium building is the attention that pride of ownership brings.  A condominium building is maintained by its owners, rather than a third-party management company or REIT, and owners take more consistent care of their common areas—and in the case of your landlord, of your unit in particular.

While common maintenance tasks can fall behind in a rental apartment building—unpainted walls, unreplaced carpets, sidewalks going unsalted in the winter—maintenance standards are often higher in a condominium building.

Ultimately, renting in a condominium building can be rental with the advantage of an ownership ethic: clean, bright, and with neighbours who will appreciate the common areas like it’s their home—because it is.