Toronto Real Estate: Why I Sold My Condos

[@anon5191]

The major development that has made condominiums less attractive is the rise in condo fees, without any utilities being covered by those fees. With rising interest rates, these fees feels like you are paying rent on your condos along with a mortgage.

[@saeednrzadeh4754]

And you should always wait for surprising cost of repair. Worst decision is to move to condo.

[@ucimkuhati7497]

That's the biggest scam. Condo life should be cheaper.

[@miralev7396]

1. When you sell your house/condos, you are subject to capital gains tax. 2. Detached homes require ongoing management and expenses, such as maintaining the roof, windows, and other aspects of the property. 3. Fully paid, cash-flow-positive condos are the easiest type of real estate to manage for passive income. From Miami to New York to Hong Kong, condos remain a key asset for investors seeking simplicity and steady returns.

[@steerpike2473]

Condo speculation worked for the last 20 years due to low interest rates and a population surge. It had nothing to do with being a savy investor.

[@TomStorey]

A savvy investor would see the trends.

[@Imsosmrt1999]

The “savvy” is knowing when to sell. Good move Tom. Being debt free is a beautiful feeling. I sold my rental in 2017 after 20 years. No regrets.

[@siddiqze]

@@TomStoreydepends on the time when one bought. I have a few that I got in good locations at great prices if I look today. Back in the day when price per square foot was 570. One makes money on purchase and not on the sale.

[@Kyt_01234]

Looks like this guy missed the boat, then lmao. ​@@Imsosmrt1999

[@fasteddy-fd3kr]

2 million Indian immigrants and no one wants to buy a condo? Guess they are waiting for them to drop to 100k rupees

[@jamesburns679]

Thanks for being open and honest. There are other real estate folks who would keep this secret

[@mrbpis]

Condos proved to be a bad investment for me. Back in 2003 it was either a condo for 250 or house for 350. I chose the condo as I thought 350 was too much, and I didnt really want a house back then. Fast forward, the condo is worth 750 and the house 1.5. The other thing is that condo fees devalue the property over time. They go up 5% a year on average, after 20 years you are now in an old building with high fees and your property value is much less than a newer condo with lower fees. Even condo townhouses with reasonable fees are valued lower than freehold towns. Buyers under estimate how much it costs out of pocket to maintain these properties.

[@CaptainBlankENT]

If you just want a decent home to live in (not talking to the investors) and can leave the GTA, I highly recommend it. Canada is a BIG place, with lots of options that won't cost you your firstborn's soul. Speaking as someone born in Toronto, I love where I grew up, but I definitely would have moved sooner if I could have.

[@kenmcintosh9480]

Where do you recommend going to?

[@AminaRajai]

Calgary is good option

[@tyrellboake]

@@AminaRajai Or come to the Okanagan! We are at least less expensive than Toronto or Vancouver 😉

[@TheShas1]

I am so happy that we moved out of GTA couple of years ago. Sooner one realizes this, more in peace they will be. This might not be true for people who have paid off their mortgage or have bought their houses when it was way cheaper.

[@edwardhudson9851]

​@@kenmcintosh9480Edmonton to buy a duplex or detached & also buy a small house in rural Saskatchewan for a retreat & retirement,that's what me & my Canadian Mrs did

[@naodtsighe6881]

Thanks!

[@TomStorey]

Thank you!!

[@shawnschafer9795]

Like your honest and learning from someone else's experience. Much appreciated 👏

[@hashoes3294]

tom big up on you for telling people to de leverage its the most responsible move right now

[@quixomega]

Identifying and dropping bad investments is the most important way to make sure you're not left holding the bag.

[@Otwo91]

There will always be up’s and down’s to every type of investment and its important to know how to move your money around and not fight the currents

[@Kevriyal5654]

Good move Tom. People forget that long term buildings, including condos depreciate. Only land appreciates.

[@salahuddinmahmood1452]

Appreciate the honesty in this video. Earned a sub!

[@Lifeisapartydresslikeit]

GDP, homes and stocks over the course of 100 years have gone up. Even if it drops, eventually it goes up higher and higher (long term) Thanks Tom!

[@siddiqze]

Great video and perspective. I watch your video and honestly wait for your and Steve’s show on Sunday. The worst part is that you do only 1 show like that per week so I need to limit myself for 15 min in order to divide it across the week. Well I think folks that bought condors till 2017 are good but anyone who did that afterwards may suffer due to the prices they paid per square foot plus the rising interest rates as well as capital gains on assessment. The point regarding paying interest is very important. People ask me where to invest in terms of stocks and get a good return. I advise them that I like to invest in tangibles and that is me. You can have a different perspective and I respect that. Also I tell people that instead of investing in a stock, you pay down the principal on your mortgage as that is a great ROI which you will thank in 20 years from now when one gets in retirement or can not work the way he or she was working early on in their life. I think we should meet as I am in Milton. I will like to meet you before you become a big celebrity and I am not sure if I have already missed the bus. Keep up the great work as I always love to stay optimistic and yours / Steve’s show give me positive vibes.

[@TomStorey]

Appreciate the comment! Glad to hear you’re enjoying the videos. Happy to connect.

[@GreenBeanGreenBean]

Uh condos have outperformed houses over the last 5 and 10 years. If the price gap isnt actively widening then houses are underperforming. Since peak houses are down a larger percentage on a larger number or 300k lower, condos down smaller percentage on smaller number or 125k. Ergo price gap which was 950k at one point is down to 750k between average house and average condo.... which means condos been outperforminging for some time. Before the peak the price gap was indeed widening but was widening slow enough that both asset types were going up almost the same percentage. Math proof: a 1m house and 500k condo go up 5 percent. Price gap is 500k. Now the house is worth 1050k and condo 525k... price gap has now widened to 525k.... the price gap has to keep widening for houses to keep pace with condos. The only time houses are better is when you go full slum lord and never fix anything.... because condo maintenance is less than house maintence but you cant get around paying the condo fees (which also include things like insurance etc)... because you get less rent for a house aka lower cap rate, and you pay far more interest...and your property taxes are much higher... all expenses are.

[@DummMoney-rr1fi]

This makes too much sense.

[@mateofernando5066]

The condo market and some of the freehold market further outside the GTA are now at the contraction phase of the bull trap. The smart early money has already exited. Prognosis is poor for the prices in these 2 segments because immigration has been curtailed and unemployment has also increased. So, telling anyone to enter in the above 2 segments is like telling someone to catch a falling knife. Anything purchased in 2021-2022 was at the peak prices and those buyers are now going to be in a world of pain and in denial of some form if they believe that the prices could even catch up in 5 years. I believe that the average condo investor that bought at the peak is out or negative cash flow on their property by $605 / month. 🤔🤔🤔🤔🤔

[@adamnarbeaux5898]

So false. I bought in 2021, and am cash flow positive and will not sell for a long time. Maybe you bought in the wrong area? Or maybe you just like to hear yourself talk 😂

[@Landstalker1999]

@@adamnarbeaux5898 Not like you can sell now anyway cuz you bought at peak during low interest rates. Nobody is gonna pay anything near what you paid. And your long term holding strategy would work if the interest rate remained low AND if CAD was doing fine compared to USD but it's not. So they will either have to raise interest rate again to save the CAD or just let the CAD and the whole country's economy collapse to safe a few real estate investors. I think the writing is on the wall. But then again you don't have a choice. If you sell now you lost money on the whole transaction. Good luck.

[@Kevriyal5654]

Telling people to buy condos when you just sold yours is why you are a good realtor.

[@afzalshaikh2128]

When you just say everything than your never have a stance on anything and your always right.

[@Landstalker1999]

No it just proves that the average person is dumb af and hence why democracy doesn't work. This is why Trudeau is still in power.

[@TomStorey]

If buying freehold isn’t a financial option right now and a condo purchase is your only path to homeownership, I believe it’s still a better long-term decision than renting. That’s what I did.

[@haunguyen1949]

You have made the right decision at the right time , my congratulations to your shrewdness and your luck as well in real estate investment. Your analysis is correct and comprehensive. Many condo investors who bought at highest prices per square footage in the 2021-23 must have been in the deep predicament to get out now . Those who have bought at your same period year in the early 2000 could wait to bail out later on , with less pain and less profitable .

[@adamnarbeaux5898]

Totally incorrect

[@Kadmos]

It's definitely cyclical. As freehold properties get more expensive, more people will settle for condo living. This makes 2bd+2ba+ with 900sqft+ units desirable still for those starting a family, bonus if it's walking distance from a major transit line. The main issue is that investors mostly bought studios or 1bd for rental income. Would not invest in those at current prices.

[@anthonydrepaul1137]

Is the waves rough yes but eventually it will stabilize. I do think we are in for a stagnant market for at least 5 years but who knows I could be wrong

[@TomStorey]

I personally think condos will pick up again in 2027.

[@vert911]

makes sense. all the agents i know need to unload their properties in the last two years. its been rough for them. i could never live like that. to have BOC shenanigans dictating my career and income is absolutely bananas.

[@AliKhan-bu1fp]

I believe the widening price gap between condos and freehold at some point will break buyers bank and push them back into condo market

[@TomStorey]

Very possible.

[@maxd2491]

Always great info and perspective

[@HarvestingIncome]

People were investing in condos like picking hot stocks. The underlying problem is these dwelling are small matchboxes unsuitable for families and end users. Its just investors who get in early to make a wuick buck that create huge demand and people who really need a place to live ar3 outpriced. Im happy to see investors getting out so that brings correction in the market. Also its music to my ears to see rationalization of immigration levels agter years of rampant mistakes by Government causing i frast4uctu3 breakdown everywhere in Canada. Also if someoen is looking to buy a condo remember that they are smaller, poorly constructed, less durable and highly expensive to maintain than a decent purpose built rental apartment. Do your own research wnd make a g9od decision.

[@theguywiththehat99]

A contrarian opinion, but while we may not see a resurgence of growth in the multifamily high rise segment like we did 2000-2020, I feel the future is promising. Continued price growth of detached housing due to limited supply will put a floor on the lower housing rungs (condos) especially once the current glut of completions passes in the coming year. Lower financing charges are also putting the returns on many condos back in the black, and with effectively zero sales and PBR builds pencilled at higher assumed rents (operators will incentivize leases but not lower rents), holding anything you already own seems to be the right choice. Unless you can find a higher yielding investment - and while theres a thesis for detached housing outperforming, that becones much more difficult if you consider disposition and acquisition costs. In other words, I might not buy condos at this point, but I also wouldn't sell.

[@adamnarbeaux5898]

Well said. Agree 💯. I have two beautiful units and will not sell for a long time

[@jonathannoga3047]

That thesis would only hold up if investors return to the market en masse. Investors are running for the exit now, leaving only the buyers that want to live in these condos, which we're finding out is a relatively small part of the market compared to the investors that effectively drove the market previously. Investors want nothing to do with condos now, many of whom are scarred from it and now realize that it's not some fool-proof way to make money. The feedback loop of consistent underlying appreciation has been broken. The leaves the end users being the ones to drive the market going forward. The reality is that the majority of the condo stock in Toronto is unsuitable for living in long term, raising a family in, etc. I really don't see many buyers justifying scraping together a down payment to get into a 25-year mortgage on the typical condo unit. The typical would-be buyers for these units are young professionals, many of whom are already leaving Toronto/Canada due to the cost of living, many are heading to the US too where the earning potential is much better. Higher prices for single detached homes won't necessarily mean that the market will accept paying more for a condo. Being in the core of Toronto doesn't carry the appeal that it once did. I think we've hit an inflection point. Just put yourself it the shoes of someone making $60-$80K a year. There's a limit somewhere at which point it juts makes more sense to leave, and that's what I see a lot of younger people doing already. We're will also be aggressively reducing immigration targets. Will condo prices totally crash? Probably not, but I think condo values will be stagnant at best, and for quite some time too (5-10 years) while the Canadian and global economies get through the turmoil they're currently in.

[@adamnarbeaux5898]

@@jonathannoga3047 poorly said. You act like you have a crystal ball. 5-10 years stagnant prices? What are you smoking? The best RE professionals and pro investors like myself can’t even predict 2025 prices. My kids are staying in Canada, not running for the exits, like yours may be. They have solid careers and are intelligent. Sounds like you are reading tarot cards or have visited Eva the psychic. Wake up!

[@Jo-mf2vu]

​@@adamnarbeaux5898 You said you have two units. Does that qualify you as a professional investor?

[@adamnarbeaux5898]

@@Jo-mf2vu hello Einstein. I have 2 beautiful condo units among 17 other rental properties over the last 19 years. So to answer your question, Yes, that makes me a HELL OF A professional investor. I guess you are a professional keyboard warrior. Congrats on that.

[@ssingh6768]

What's your take on condo-townhouses (3 bed types)? Do they follow more of the condo-apt trend or the freehold ones?

[@TomStorey]

Condo townhouses are doing better. Especially the ones that are not attached to the bottom of a condo building, but rather their own townhouse community. Buyers are looking for larger spaces.

[@thevultrantransituniverse1487]

Do you still see Toronto condo investors bleeding money this year?

[@TomStorey]

If they bought pre construction between 2020-2022, then absolutely. Anyone else, all depends on how long they have owned for.

[@thevultrantransituniverse1487]

@ do you expect also the condo inventory to remain high this year?

[@Math100percent]

If you have 90% downpay. You will have positive cash flow😂

[@revaholic]

But where the heck are you finding affordable freehold units in Toronto?

[@davidbach8711]

Wow - that's a bold move

[@vert911]

now that they are sold condos are guaranteed to go up in price 15% next year . this is how it works.

[@TomStorey]

This is the way.

[@Ckfexe]

Condo no more a good investment, thank god I did not buy one at 2022 , instead I put in US stock market and it went well

[@Sarahyangtoronto]

Long term is still good though.

[@TomStorey]

Absolutely.

[@ravinder42bajwa42]

Eventually, the government has to pick between the canadian housing sector and Canadian dollar. If you know what i am saying

[@DummMoney-rr1fi]

i hear what your throwing down

[@wumble7829]

You sold at the bottom. Real estate only experiences a few years of downturns and long term growth. As rates drop, real estate will spike again over the next 10 years.

[@markcameroon6613]

why not rent them out since they are paid off? make cash flow

[@DummMoney-rr1fi]

why rent them out, each person has different motivations

[@DummMoney-rr1fi]

my personal opinion is to stick it up Ravi's butt if that's what you want. Freehold property rights give the owner the right to do whatever they want

[@nikokovac7423]

Pre-condos should have never been such a guaranteed return on investment and assignment sales should have been banned a long time ago. It would be a much more normal market for the average Joe the last 10-15 years.

[@stephanienguyen6992]

SMART - why paid $800 to $2,000 maintenance fees - by sweep a leave.

[@yulongsong961]

No land no buy

[@DummMoney-rr1fi]

lots of land to buy if you are willing to pay the price

[@abhishek8587]

What about for first time home buyers who wants to actually live in the condo for next 5-7 years? (Like a 2+1 bedroom unit, 1000 sqft, less than 750K)

[@TomStorey]

Makes total sense.

[@abhishek8587]

@TomStorey thanks! Going to put an offer down on a good condo we found. But there's lot of gloom and doom surrounding condo purchase , so I keep double guessing myself 😅

[@DummMoney-rr1fi]

@@abhishek8587 not using Tom?

[@pkiskool]

Less than 750k for a 2 bedroom condo…?

[@brandondimopoulos9534]

Rental owners are the problem. Passing their debt to tenants. It's about time if you cant own it without renting.. you wont.

[@truerebelproduction6452]

I am buying digital property called bitcoin

[@TheDentist27]

Never sell

[@DummMoney-rr1fi]

I'm holding forever, exception has been the only condo I ever owned. It was the best unit in the building and still a headache compared to SFH's. Can do almost whatever you want with a SFH....

[@andrewmccoll1582]

Wish you hadn't pulled the ladder up behind you

[@TomStorey]

It’s still there, just harder to reach. First-time buyers today might have to build a few extra steps to climb on.

[@grossearwax3777]

bro should put all that cash into bitcoin.

[@tylerjodeblock1224]

It outperformed M2 money supply, it out performed RE, it's out performing gold, yet people still like to make fun of it even after it hit 100k per coin

[@joebachmeier6747]

Condos were a good investment but overall all shitty idea

[@shawnschafer9795]

Like your honest and learning from someone else's experience. Much appreciated 👏

[@shawnschafer9795]

Be nice if civil servants were honest as you

[@DummMoney-rr1fi]

@@shawnschafer9795 Tom is the bomb