Several years ago, I would have advised a one-bedroom + den over a one-bedroom suite, because of the flexibility it offers. Now, with the proliferation of families choosing condominium living in Toronto and the GTA, my advice has changed to suggest a two-bedroom suite. Often the difference in price to jump to two bedrooms is well worth it. Of course, investing in a suite is always about return-on-investment, so factor in all aspects of your purchase.
One-bedroom and one-plus den suites in condominiums on transit lines will always be snapped up by those who want urban living without having to own a vehicle. We are, however, seeing a trend toward two-bedroom designs as investments. In addition to families, post-secondary students can share costs in condos located close to colleges and universities. Keep in mind that our universities are among the finest in the world. In fact, University of Toronto ranked 22nd out of the 980 schools considered in the World University Rankings 2016-2017. Parents often purchase a two-bedroom condo suite for their own child and rent out the other bedroom to another student to help offset costs. At the end of the exercise, they have built equity rather than spent money on a dorm room for years, with no financial return.
That second bedroom can become an office, nursery, artist studio … the possibilities are amazing. So are the potential rents. A rule of thumb is that rent is on average $3.50 per square foot. Let’s say a 500 square-foot, one-bedroom suite rents for $1,750 a month and a two-bedroom design at 700 square feet goes for $2,450. With two people sharing expenses, neither has to pay out $1,750.
And talk about demand! With the skyrocketing prices of low-rise homes and our regular influx of immigrants who are used to high-rise apartment-style living, condos will continue to augment Toronto’s rental market. Invest wisely and reap the rewards!