Condos are sprouting everywhere in Montreal as more and more developers take advantage of the demand for high rises in the city. If this is your first time to purchase a condo, take note of the following condo investment strategies:
Location, Location, Location
What makes a condo advantageous over a house is its location. When a person lives in a condo, they don’t have to waste hours driving to and from the office. So, make sure you pick a condo that is near your workplace or at least, in a location that is near commercial establishments including restaurants, grocery stores, malls and offices. That way you won’t have to worry about being stuck in traffic during rush hour.
Unless you’re paying cash for the condo, you have to know your financing options. Are you going to borrow money from family? Or are you going to get a loan from a bank? Buying in cash can entitle you to significant discounts but these days, very few people pay in cash outright. Besides, you also have to set aside enough money for emergency expenses so it’s not exactly a good idea to take out all your life savings to pay for the condo.
When borrowing money from the bank, make sure you can pay for the monthly amortization because any delays in payment can result in very large penalties. If you plan to rent out your condo, check the amortization versus the rental income that you may get from your property. Your rental income should be higher than your monthly amortization so that it becomes a self-liquidating investment.
The price of the condo is not the only thing you should be concerned about. You also have to pay for other expenses including closing costs, monthly association dues and decorating your new condo’s interior. Plus, you need to pay real property tax as well as property insurance. And if you will rent out your unit, you also have to take care of income tax as well as the cost of advertising.
Read the Fine Print
Before you become a new owner of a condo here in Montreal, you’ll need to sign a contract, which contains a deed of restrictions and guidelines. These restrictions will determine what you are and aren’t allowed to do once you move into your new home. Some condos do not allow pets, while others may have other restrictions. It’s essential that you learn all the guidelines before you decide to buy the property.
Buying a condo in this day and age can be a good investment decision. The real estate market in Canada as a whole is doing very well, and in fact, it has attracted lots of foreign investors from China, India and other parts of the world. But before you part with your hard-earned money, make sure you’ve done your homework so you will end up a new owner of a fabulous condo in an equally fabulous location.