As you know, at CondoWong we love to be innovative.
So here I am, the first version of CondoWong AI!
And I will be your host for 2 episodes where I bring you out to actual condo units for case studies.
In this first episode, I will show you 2 units in a condo by the downtown waterfront.
They were both priced at $750,000 at pre-construction back in 2018.
The first one is a south facing 667 square foot 1+Den unit with partial lake view.
The second one is a northeast corner 2 bedroom unit, 735 square feet with a wrap around balcony.
They are on the same floor.
On paper, which one would you pick?
Comment below and let me know.
Now, let me bring you out to the actual units.
You let me know whether you have changed your mind after seeing the real thing.
And I will let you know which unit gets more rent and which unit rents out faster in today’s downtown Toronto rental market.
Alright, ready? Let’s go!
Welcome to the 1+Den unit.
We have a very spacious bathroom.
And a very big den. You can fit a double bed here, no problem at all.
Kitchen and dining area.
Here’s what you pay your premium for.
A lake view on the south.
The construction there will be a huge public park, so your lake view will be pretty permanent.
Coming back to see the bedroom.
Small walk-in closet.
And you also get a nice lake view from your bedroom.
Now let’s check out the 2 bedroom unit.
A full bathroom here.
The living and dining space is quite a bit bigger than the 1+Den.
And you get a north view over to the downtown core.
Looking east with the Gardiner Express and Go Train rail.
I personally think the city view is pretty nice too.
A small bedroom with lots of windows, but you also get a huge pole at the corner.
The master bedroom with an ensuite full bathroom.
So, for the same price, which unit would you pick?
I can tell you that on paper, the 1+Den sells better than the 2 bedroom.
People just love south facing.
There’s a premium…
They still want to face south.
And with the lake view, it was an easy sell.
Now that the real thing is built, how are these 2 units performing in the rental market?
Which one gets rented out faster?
It took us 20 days to find a good tenant for the 1+Den.
For the 2 bedroom unit, it took us 44 days.
The main obstacle was the huge pole in the smaller bedroom.
You can fit a double bed there, but it’s tight.
In downtown Toronto, it is typical that 2 bedroom units are rented by 2 friends sharing the rent because that is cheaper than renting a 1 bedroom unit each.
For this particular 2 bedroom unit, it was tough getting 1 friend to take the room with the pole and the other take the master bedroom.
What about the rent?
The 1+Den and the 2 bedroom had the same price, should we expect the same rent then?
The 1+Den was leased for $2,600 per month.
And the 2 bedroom was leased for $3,200 per month, $600 more than the 1+Den.
So in terms of rental yield, the 2 bedroom is much better.
What about the resale price?
There’s no data available yet because this building is still undergoing occupancy.
My guess is that the 2 bedroom would sell a little higher because it is a bigger space with 2 bedrooms and 2 full bathrooms and the view is really not bad at all.
Again, this goes back to the same lesson I shared with you a couple weeks ago.
If you are buying an investment unit, don’t put your own emotions into your decision because you are not your buyer.
Investors love south facing units and they love views.
That’s why in most pre-construction projects, south facing units always have a premium.
But when it comes to end users who are actually living in these units, they might rank things differently than you.
For example, they probably appreciate space more than views.
One common mistake I see from investors is that they always want to buy parking.
Because they live in the suburbs and they always drive themselves, so they think parking is a must.
Contrary to what they think, a lot of people actually don’t drive in downtown Toronto and they are not willing to pay extra rent for a parking spot.
I hope you enjoyed this episode with a real case study.
Next week, “Is home staging worth your money?”
I will answer that question by showing you another 2 units.
Make sure you subscribe and hit the bell now so you won’t miss the answer.