As someone deeply entrenched in the intricacies of urban living and real estate dynamics, I've witnessed firsthand the growing popularity of condominiums, particularly in bustling urban centers like Toronto.
But before we explore the nuances of rent-to-own arrangements in Toronto's condominium market, let's take a moment to dissect the benefits and drawbacks of owning a condominium in this dynamic metropolis.
Join me as we embark on a journey to unravel the mysteries of rent-to-own agreements and navigate the complex terrain of renting versus buying in Toronto's condominium market.
Quick Summary
- Rent-to-own condos are gaining popularity in Toronto as an alternative to traditional buying, especially for those with imperfect credit or insufficient down payment funds.
- Rent-to-own agreements allow potential buyers to secure the purchase price of a condo while renting, which can be beneficial in a rising market.
- Buyers typically need a minimum income of CAD 100,000 to afford a condo in Toronto.
- From my experience, it’s vital to conduct thorough research and consult with professionals when considering a rent-to-own agreement to mitigate risks and ensure a smooth transaction.
The Benefits of Buying a Condo in Toronto
Before we get into that here at Precondo, we will discuss first the 3 benefits of buying your property instead of renting to own in Toronto.
These were assessed by our real estate experts to give you a view of what condo owners were experiencing when they purchased their condominiums.
1. Affordability
While purchasing a piece of land in the middle of the city is undoubtedly expensive, the purchase of a condo could be your first baby step to owning a piece of property in the city.
Rent-to-own Toronto condos are low-priced than the housing units available for families.
The low prices stem from the fact that condominiums are sometimes uncomfortably small, and that they don’t take much land space, but are just a tiny piece of a block of similarly sized condos glued together into a very compact space.
2. 24/7 Security
If you ask around, most of the people who own a condominium in Toronto will say they purchased it for the excellent protection it offers. Condos usually provide gated security, a doorkeeper and security officials residing in the building [1].
3. Wide Array of Facilities & Amenities
Toronto condominiums come with essential amenities like a parking garage, a pool, and a gym. You don’t have to reach far and wide for these essential amenities if you are a resident of a condominium. It's the convenience of these facilities that make condo living more ideal than a house.
Drawbacks of Buying a Condominium
Discussing only the benefits would be incomplete without the disadvantages. In the section below, we'll discuss what the Toronto condo renters thought about before buying their own property.
1. Condos Can Be Stifling
Living in a condominium in Toronto is fun and all, but when you have to run everything you want to do with your home by the condo association, it can get a little annoying and very stifling.
It’s not as independent as owning a house, and you usually have to ask for permission before making any significant changes to your condo.
2. Privacy Issues
Toronto condominiums are like Lego blocks all fitted together in a high-rise tower. Privacy is a foreign concept, and walls are paper-thin.
You can hear the traffic, hear your neighbors’ activity out in the hall when they pass by, and getting some peace can be a challenge. It could be inconvenient when you're a light sleeper since some residents could be more active during the night time.
Rent To Own Condo FAQs
Now that we have covered the pros and cons of buying a condo, let’s see if owning one is worth it. A lot of renters have been jumping into purchasing the condos in Toronto that they are renting, and so far the buyers have only seemed to increase in number.
Here are some of the frequently asked questions for your review.
1. "What should I expect?"
There’s no room for surprises when you go to buy a condo that you currently live in.
You can sign a rent-to-own agreement and work your way towards buying the condominium.
You know the advantages and disadvantages of living in a condo in the middle of a busy and noisy city like Toronto, and if you’re debating buying it, then there must be something you like about it.
Since you have already experienced living in a condo, what you see around you is exactly what you get: warts and all.
So, if the condominium you live in is not underfunded, and you are satisfied with the management, then owning one might be a good idea.
Rent-to-own Toronto condos are an attractive choice for buyers with imperfect credit scores.
Individuals aiming to solidify their credit ratings find agreements appealing as they offer the opportunity to build a strong credit foundation and organize their financial information for a loan application.
This deal allows buyers with imperfect credit scores to live on the property and pave their way towards buying the condominium.
2. "Is it a Good Idea?"
Having a rent to own Toronto condo is an excellent idea if you’re either recovering from bad credit or are not yet financially stable to make the down payment on a mortgage - the caveat would be finding the ability to rent and then own the property as it's not commonplace in the city.
The agreement allows potential buyers to secure the price of the property and lock into the purchase agreement while they slowly save enough to be able to purchase the property.
Rent-to-own is an alternative route to homeownership for those who can’t obtain financing due to poor credit or because they don’t have enough money for a down payment (or both). - Erica Alini, Global News
3. "How much would it cost?"
Real estate prices have been scraping the skylines for quite some time now. Property prices rise rapidly and take a long time to come down to the first rates. So, if you’re sure that you want to purchase a certain condominium in Toronto, you can nail down the price by signing an agreement on the property. You can live on the farm, lock down the rate, and steadily build your way towards purchasing it.
Scams & Agreements Gone Wrong
These agreements seldom run a relatively high chance of being a scam or going wrong. These agreements are not highly monitored which causes a few loopholes to turn up around the time of purchase of the property.
Real estate owners often don’t intend to sell their property in the first place and keep the potential buyer waiting by renting the property at high rates and keeping the tenant from being able to make the purchase.
Eventually, the tenant runs out of time, and the agreement expires before he can save up enough to make a down payment on the property, and he is eventually evicted.
Scammers in Toronto are always looking to take advantage of unprepared tenants or tenants who put too much trust in the owner without doing their research. This is why it is recommended to consult licensed real estate agents or real estate lawyers to be able to make sure that no loophole isn’t being tied up or if their client is running a risk of being scammed [2].
Closing the Deal: Final Considerations for Renting vs. Buying in Toronto
Seeing as there is an equal chance of a successful rent to own transaction as there is of getting scammed or failing to make the payment within the time of the agreement; we say it’s better to explore your options before you go for this option for the purchase of condominiums in Toronto.
References:
- https://www.canadiansecuritymag.com/news/industry-news/understanding-condo-security
- https://www.stcatharinesstandard.ca/news-story/8601991-real-estate-scams-could-be-increasing/
