Buying a condominium in Winnipeg can be an excellent investment. It may be your first real estate purchase. Saving enough to buy a single-family home can be challenging due to soaring prices. Condos are less expensive, and many Winnipeg households are going this route to buy a place now rather than continue paying for rent in an apartment. They can live in the condo for as long as they like and then either sell it or rent it out (as long as the bylaws for that building allow it to be rented out).
Others buy condos in Winnipeg as additional property. They understand the value will increase as time goes by, and they want to reap the rewards of betting on board with it now. They don’t intend to live in the property but rather rent it out. They rent it for enough to cover the cost, and once it is paid for, they will have profits from that continued rental process. It is common for such investors to buy more than one unit in the same building.
Renting out units for what the costs are, including the mortgage and condo fees, means you gain equity without spending any money out of pocket. You have to be selective about who you rent to. If they don’t pay on time or they don’t take care of the place, you could end up evicting them. You don’t make money when the unit is empty, but the mortgage and the fees are still due.
Living in a large home when you get older, and your children have grown up can be challenging. The upkeep of the house and the yard can be too much. The hold may be additional repairs due to the age. Selling that large home for a profit and buying a condo in Winnipeg can be a delightful change. It helps financially, and it means less involvement with repairs and maintenance. Living in a condo is a great way to meet new people and be part of a built-in community.
Diversifying your portfolio of real estate is a good idea. Condo units in different neighbourhoods of Winnipeg can give you some leverage. You can consider selling as the demand increases in a particular area. Owning several properties is possible as you make a profit, too, because you can continue re-investing money into your next venture.
Condo Investment Budgeting
Real estate ownership is a significant investment, and you want to avoid getting in over your head. While investing in a condo in Winnipeg can be a good move, you must know the costs involved. The purchase price and your interest rate will determine your payment. There will be a down payment and closing costs involved, too. Monthly fees are associated with living in a condo, and it is crucial to understand those costs and what they are allocated for. Plus, you may need additional insurance besides what the structure offers.
It makes sense to own a place to live and build equity rather than spending money each month on rent without any return. Often, there isn’t much of a difference in Winnipeg between the cost of rent and buying a condo. You need money upfront to get started, but your monthly payment can be similar to what you would pay for rent. It is worth it if it is a bit more due to the ownership element. Carefully evaluate your budget because you don’t want to live paycheck to paycheck each month when you invest in a condo or any other type of real estate.
Getting traditional financing for a condo can take more work than a single-family home. There are some outstanding loans and offers out there. Based on the current market, your real estate agent can give you some direction on this. If you have money to invest from savings, selling a home, or other income, you can reduce the financing you need to buy a condo. While you still have overhead costs with a condo versus a single-family home, they are easy to budget for. You know what those costs will be year to year.
Some lenders need more information or experience to handle condo loans. Don’t worry; the good news is plenty are paving the way. They are working hard to become experts in this type of lending. They want to help you buy a condo and help remove the typical roadblocks that could be in the way. If your bank doesn’t lend for condos, don’t give up. Conduct some research to ensure you get an outstanding lender, one with a solid reputation.
Return On Your Investment
Buying a condo in Winnipeg as an investment makes sense. There are plenty of opportunities to benefit from it. This can be your primary residence for a short time or the rest of your life. It can be a way for you to build equity and make money when you sell your unit. It can also be a rental property, offering you a monthly income from your unit or units.
The rate of appreciation for any condo depends on many variables. The economy is a huge factor and one beyond your control. The statistics show that condos continue to increase in value each year, which is encouraging. The growth will add up each year you continue your condo ownership. Other variations include:
- Age of the building
- Housing demand
- Population growth
- Proximity to public transportation
- Size and layout
Carefully review all documents relating to the building a condo you have in mind is located in. Find out the fees and bylaws you would incur if you buy a unit there. Hire an expert to examine the building and the unit you wish to buy before you proceed with any paperwork. This is the same type of inspection that would be conducted before the purchase of a single-family home. Once you complete the purchase, you want to avoid any hidden problems such as leaks, cracks in the foundation, or mould.
Documents relating to the maintenance and repairs of the condo structure should be requested. Review them and verify they are current. If the building is older, it may need some extensive repairs soon. Residents of the building will be covering those costs. For this reason, a newer structure may save you money in the long run.
Condo Investing Frequently Asked Questions
Are Winnipeg condos a good investment for beginners?
Condos in Winnipeg can be an excellent starting point for beginners interested in investing in real estate. Condos cost less than the average single-family home. It also takes less time and money for the upkeep/maintenance. With a condo, most of that is included in the fees you pay for your unit.
Do condos appreciate in value?
Condos appreciate in value and tend to do so at a steady rate. They offer a good return on the initial investment. They appreciate at a slower pace than most homes, but they don’t have the spikes and dips like homes either.
What are the disadvantages of investing in a condo in Winnipeg?
While there are advantages to owning a condo, there can be some disadvantages. If you don’t like the idea of neighbours nearby, this isn’t the right place to live. You can still do well with it as an investment by reselling it or renting it out. There are policies and bylaws you must abide by with any unit purchased. They are established for the entire building; anyone buying must agree to those terms. You don’t have the same freedom you would have with owning a home.
There can be rental restrictions on your unit, especially for Airbnb scenarios. If your plan is to rent out the condo, it makes sense to verify the bylaws don’t prevent you from doing so. There are fees associated with the units, and everyone pays their share. If your unit is empty several months out of the year or you don’t use some of the amenities, you still have to pay those required fees.