It goes without saying that there’s a lot of factors that are to be taken into consideration when investing in a pre-construction condo. Does the developer have a good track record? Am I investing in a good neighbourhood? What is the transit situation? One thing investors can get fixated on is getting the highest floor possible, for the best value. But will that always provide the best ROI?
Higher vs. Lower
You will always hear that the higher floor is the best- and for good reason. Renters are usually willing to pay a premium, there is typically less noise, and the views are always just a little more breathtaking. That being said, there are many great units available in the middle or lower level units of most condominiums. Many units on the lower levels can be overlooked, but can still come with a great view and great ROI opportunity. As long as the view clears surrounding buildings, there will likely be a great value per square foot, and a great investment opportunity.
Lake vs. urban view
The reality is that the higher vs. lower debate will change from project to project. Projects in Toronto can offer a captivating view of the cities skyscrapers or a beautiful view of Lake Ontario – some units offering both. Aquabella Condos for example, offers a Lakeside and Urban Collection at greatly different prices. The Urban Collection starts at $687,000, whereas the Lakeside Collection begins at $1,124,000. This project is a 14-storey building, however, so units in taller buildings that offer better views of the city are likely to see a far less difference in price.
Making the best investment depends on how much developers are charging per floor, the quality of the view, and what renters are going to be willing to pay each month for a unit in the building. Here are some things that will better help determine if it’s worth investing on a higher or lower floor.
Are the premiums on higher floors units worth it?
How much is that premiere view worth? The higher you go up, the more premiums you are going to pay. In cities like Vancouver, it is not too uncommon for premiums to reach as much as $10,000 per floor – especially in condos with prime views right on the Pacific Ocean.
In Toronto, you will likely end up paying anywhere from $1,000 to $2,000 per floor. Is the difference of 10 floors and $20,000 worth it. For example, Max Condos on 81 Mutual St. offers its residents great views of the city. The prices are currently $417,000 for 2 beds and 610 sq ft. on the 6th floor and $447,990 for a suite 30 floors up. The difference being $30,000. In some cases, it may be just as difficult to make up the difference in rent while you hold the property.
If you are looking to turn a profit in the short-term, perhaps look towards the middle floors. A lot of savvy investors will look for the “lowest floor that clears”. For example, if the condo is next to a 10-storey building, look to invest in the unit on the 11th or 12th floor. Long-term, it may be worth it if the renters are willing to pay a premium rental fee and you’re looking to hold on to the property for a while.
The only negatives affecting those living on the top floors of a tall building would be long waits for the elevator. The wait for the elevator really depends on the efficiency in how a condo plans to operate. In 2015, Toronto 911 received 2,862 elevator rescue calls, not to mention the thousands of instances where the elevator was in repair.
Ultimately, you need to put your trust in a reputable developer who will install a fast, efficient, and reliable elevator system. It may be worth seeing how the elevators run in other condominiums built by the same developer. Reputable developers like Mizrahi Developments will be sure to feature a top-of-the-line elevator system in their new 80-storey project, the One Condos.
Make sure that view will last
When the best thing to sell your condo unit on is the view, it’s important that it remains that way. The last thing you’d like to see is a new building comprising your stunning view of the city. Try to get a sense of the development in the neighbourhood, and if any new projects are coming down the line. If you’re really concerned about your view being blocked, invest in a nice view right on the water.
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