I suppose it was only a matter of time. Real estate has long been my passion, and I’d been hearing about the joys of property investing since I started out in the business decades ago. So in 2011, I finally took the plunge!
If you haven’t read about how I started my condo investment journey, you can get the full story in a post I wrote a while back. For those who prefer the short version, here’s how it went down. I bought a promising pre-construction unit in downtown Toronto, which I rented out from August of 2015 to August of 2017. During that time, I built an impressive $100,000 in equity. Of course, the story doesn’t end there…
In the last couple of years, there have been some seriously profitable developments. I’ve learned a lot about real estate investing, and I can’t wait to share my insights with you!
23 Glebe Road West: the next chapter
After my tenants left in 2017, my husband Dom and I repainted, furnished, and began to truly enjoy our investment property. It’s funny: part of me had been wishing I’d bought a place with a better view and a second bedroom, but I fell in love with our little condo all the same. Those 568 square feet became not only a second office for me, but my own private pied-a-terre.
As much as I savoured my time at 23 Glebe Road West, I recognized the unit for what it was—an investment. Building equity is one thing, but I knew our condo (located a stone’s throw from the Davisville subway station) had the potential to bring in some real income! I also had the right experience, having managed furnished rental units for two of my clients and rented out my own condo townhouse in Collingwood. I knew the process was fairly easy, and liked the idea of getting rent upfront—at the beginning of each rental term.
I’m excited to report that I’ve just negotiated a new lease! I had hoped to rent the place out for 6 months, which is the shortest time allowable in our building’s bylaws. In the end, we opted for a 1-year lease. Our tenant (an engineer from Quebec) is paying $3000 per month for our place—and given that most fully-furnished units in downtown Toronto are at least $5000 monthly, that’s a pretty good deal!
Doing the math
Here’s something I didn’t talk about in my original post. When I was trying to get Dom on board with the investment, I don’t think I was quite as upfront as I could have been. Although I mentioned that I hoped to rent the condo out as a furnished suite, I think he was under the impression that I was going to sell it on assignment (before closing). Now that I’ve actually worked out the return on our investment, I feel a little bit silly for having kept quiet about some of the details!
First off, we bought this gem for $315,000 (or $561.10 per square foot) in 2011. In 2019, the exact same model sold for $528,000 (which is an impressive $937.00 per square foot). Of course, we also paid HST on our purchase. Luckily, investors who can prove they’ll have a tenant for at least a year can get a large portion of this tax back as a rebate. How much you receive will depend on your circumstances, but for us I believe it was 80 per cent.
Our total monthly rental income is $3000.00.
Of course, we also have ongoing expenses to pay. Here’s how they break down:
Mortgage : $604.94 (biweekly)
Condo fees (monthly): $356.27
Property taxes (monthly, 2018): $180.00
Parking: $ 200.00
Total monthly expenses: $2119.15
$3000.00 – $2119.15 = $880.85 profit per month
The numbers speak for themselves. Our total monthly rental income is $880.85. Put simply, this was a smart investment—and I have to say, I’m proud that I made it!
Should you consider investing?
When we started renting out the condo, we weren’t paying for WiFi, hydro, or parking (since our tenants didn’t need a spot). Still, we were in a deficit. Typical rents were lower then—as recently as 2017, they were sitting at around $1500—but they’ve exploded in the years since. There’s no shortage of demand in the furnished market, which has been great for us!
When I tell friends how significant my return has been, they can hardly believe it. But things would have been very different if we hadn’t stuck with it. I think that, all too often, we allow our fear to prevent us from taking a risk.
I’ve found this to be true for a lot of people in my age bracket. I’m talking about those of us who haven’t yet retired, but can see it on the horizon. Those of us with grown-up (or almost grown-up) children, as well as aging parents. We have our fair share of ongoing responsibilities, but we’re also aware that a major life transition lies not too far ahead. There may be reason for us to be risk averse—but that doesn’t mean we shouldn’t benefit from a profitable real estate investment!
If you’re thinking about retirement (whether it’s right around the corner or a decade away), now is the time to start planning for a financially stable future. One of the best ways to build your nest egg is through relatively low-risk, high-reward investing—and real estate fits the bill. I truly believe that everyone my age should own at least one investment property!
I’ll be the first to admit that the numbers will probably look different if you buy today than they did for those of us who bought in 2011. That said, there’s no shortage of incredible investment opportunities out there. In particular, renting out a furnished unit can provide some pretty impressive returns, given the number of young professionals flocking to Toronto’s downtown core. Of course, you don’t have to go this route—the key is having a basic understanding of market demand and keeping an eye out for the opportunity that’s right for you.
The best part is, it’s never too late to get started. If I can do it, so can you! So what are you waiting for?
Whether you want to learn more about real estate investing or you’re ready to start the search for your ideal investment property, I’d love to help. To take the first step, me a call at 416-550-7555 or reach out at Lisa@LisaSinopoli.com.