Condo Investor

by Darrin DeRoches March 28 - April 3, 2013

The big move to Hamilton is constantly being talked about and is it really true? There is a property in a sketchy area of Hamilton that is promoting an entire block available to build a new apartment tower since Hamilton is a having an influx of people moving here. All the papers and magazines are writing about this huge movement and there are examples of people moving here but how many and why? Condos are going up and more are in the pipeline so a new tower geared towards rentals makes sense or does it?     There is around a 3.5 per cent rental gap in Hamilton and if you believe statistics it is considered low in comparison to other markets. We are the best place in the country to invest in real estate right now so all the indicators show we will be in need of more rentals. My only question is when exactly are the droves of new Hamiltonians supposed to show up? I personally have written about all the inquires and excitement about our city and even made fun of real estate agents who mock the new condos as “who the hell are going to live in them?” but you still must wonder – when?     I believe the new influx of condos will not only bring more people to our city it will bring in the “condo investor”. These people have bought and sold condos in Toronto, Vancouver and Montreal where they buy multiple units with the sole intentions of selling them for a profit when the project completes. It is a pretty simple way to make money over a short period of time. They buy at the lowest point before the project begins and in a couple of years when the project is actually built they make the increase in value. This increase can be a good 20 to 40 thousand dollars an a average unit. Hamilton had a 7 per cent increase in value in the last two years, with this and buying first and then selling high, money is to be made.     People always ask why there are units for sale once a project completes – it is the investor. The only problem with this is sometimes the units will not sell and the investor then puts them up for rent. A new project in the west end did just this and you can rent a condo for around $1,300 a month since they are unable to sell – right away. This influx of condos and potential rental units into our downtown market is most likely more than we will need when it comes to quality rentals. Let’s be honest there are not a lot of people who can afford to rent a $1,300 dollar condo and save enough money to eventually buy their own home. If you can afford that rent you can also afford to buy the condo itself or a great home in our city. We are still priced affordable compared to everywhere else so the investor may be careful jumping into our market! V         Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.