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SHOULD YOU BUY PARKING FOR A CONDO INVESTMENT?

By CondoWongFriday July 19, 2019

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When it comes to condo investment, should you buy parking?

How would life be in Toronto, without a car?

If you have been living in Richmond Hill or Markham, maybe you moved back to Hong Kong quite some time ago, it might be very hard to imagine living in Toronto without a car.

I don’t blame you. No car. No freedom. That’s how it used to be, even just 10 years ago.

What is the lifestyle of the younger generation nowadays?

I think it would be interesting to share with you, a typical week of a young doctor who lives and works in downtown Toronto.

I interviewed this young doctor who loves to work, but also loves to play.

She lives in a 1+Den condo at Bay & College in downtown. She uses her den as a giant closet.

Lifestyle and quality of life are important to her.

She walks 5 minutes to work everyday to the Toronto General Hospital.

If it’s a super tiring day, she goes home right away, lies on the sofa and calls UberEats. Food gets delivered right to the door.

Literally right to your door, you won’t even need to walk down to the lobby.

I had been to the lobby of her condo during dinner time and it’s definitely rush hour for the security guard. There was a line up of delivery guys waiting for permission to go up and deliver. That’s how popular food deliveries are in downtown Toronto nowadays.

If she has a very stressful day, she would go out for a nice dinner and drinks with other doctor friends, to complain and de-stress. She Ubers everywhere because it’s super fast and simple. No need to find parking. No drink and drive.

She also travels a lot to the United States for work. She likes to take the subway to the Union Station, then the Union Express to Pearson Airport. It’s faster without the traffic jam.

When it comes to household supplies, she orders from Walmart, Amazon and such… So she just picks up her stuff from the concierge.

I have asked her how come she doesn’t buy a car. She said she just doesn’t see a need for it and car maintenance would just be a hassle for her.

Interesting, isn’t it?

Actually, even my own lifestyle changed a lot too. I also Uber very often even though I have a car. Sometimes it’s because I want to work through a traffic jam… Because I’m too lazy to find parking downtown… Because I’m planning to drink…

I think there are 2 main reasons why people are shifting to a car-less or car sharing lifestyle.

#1 Cost

How much does it cost to own a car?

The most Googled car brand in Canada last year was Toyota. So let’s look at the cheapest car in Toyota, the Yaris.

To lease a Yaris is around $335 per month, tax in.

Regular maintenance costs like oil change, winter tires, servicing brake, etc… Let’s budget $50 per month.

Parking fees, this can vary a lot. If you’re in downtown, it could easily be $30 per day. But let’s just say $100 per month for now.

Car insurance, that’s a big cost, especially for young people. On average, $250 per month.

So it roughly costs $870 per month to own a Toyota Yaris.

In the market update last week, we saw that the average rent for a 1 bedroom unit in Toronto is $2,192. If you add another $870 on top of it for the car, you can easily see why a lot of people would say no to a car.

Just to give you an idea on the alternatives. A TTC monthly pass costs $150. An Uber trip from Richmond Hill all the way to downtown is $40.

#2 Time

Traffic jam has become a very serious issue in the city of Toronto. And if you factor in the time and hassle to find parking in downtown Toronto, You’ll find that driving often adds more stress, but doesn’t necessarily save you time.

Back to our original question…

When it comes to condo investment, should you buy parking?

A parking spot in downtown Toronto is typically $70,000 nowadays.

Your potential tenants are likely people who enjoy a convenient city life.

And now you know that owning a car means more costs for sure, but no guarantee on less time and more convenience.

I’d say a parking spot is not necessary at all in downtown Toronto.

This is also the reason why it is so important to invest in downtown or along the subway.

In the next video, I’ll share with you, the 3 key areas in Toronto that I recommend for investments.

Make sure you SUBSCRIBE to my YouTube channel so you won’t miss my upcoming videos.


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