I came across this entertaining BNN clip below.
I wholeheartedly agree with Kevin with why condos as an asset class are not great investments. We differ however in that I believe this to be true regardless of whether the GTA real estate market is hot, like right now, or not.
Unlike Kevin, I also believe that real estate continues to be a superior investment class, as long as you always focus on cash flow positive properties in great areas within specific municipalities.
It may surprise you when I say that Toronto, which remains a hot bed for speculators NOT investors, is not one of my targeted investment areas. At least not when it comes to buying condo housing units there.
In fact, I consider my targeted real estate investments far more superior, offer way better returns with lower risk and remain the best vehicles to achieving financial freedom that I know of than any stock, in fact any other investment for that matter, even those advocated by Kevin.
Unlike Kevin, I firmly believe that real estate remains an excellent way to achieving our financial freedom and retirement income goals.
Unfortunately, Toronto condos won’t get any of us there. Besides, who wants to live in a 600 square foot 3 bedroom shoebox “sleeping while hanging from a ceiling like a bat”. I am fully on board with Kevin on that one.
Instead Millennials, or anyone really, contemplating on jumping in to the housing market, who wish to live in Toronto should consider renting where they want to live and investing where they can maximize their returns.
Here’s the dirty little secret know one ever taught us back in school.
Your home is NOT one of the biggest investments you will ever make, contrary to what we have all been taught. It will always remain a liability.
Even after you pay off your mortgage you will continue paying for your home hydro, gas, water, cable, internet, home insurance, property taxes, repairs and in the case of condos, the added bonus of ever increasing maintenance fees!
That does, not sound anything vaguely like an asset to me. Perhaps a money pit, but surely not an asset!
In fact, if you are hoping for your home to appreciate in value, which honestly is the only way it can ever generate a return, that is called speculation NOT investing!
Yes, people have been “lucky” with their home appreciation over the past several years, but nothing goes up in a straight line and “luck” has never been a sound investment strategy. Otherwise, we would all be retiring from our massive lottery and casino wins.
So let’s get real here. Be an investor, not a speculator or gambler. Buy real estate, to either live in or to invest in with your eyes wide open and for the right reasons. Reasons that you are fully aware of and that will fully meet your needs and expectation.
To be clear, buying a condo in Toronto is unlikely to get you either. If you want to live in one of these condo units, then by all means do so. Live your life how and where you want to live it.
Simply renting a unit where you want to live from someone else who got suckered in to buying one, and investing in real estate where it truly makes sense to do so is a much more prudent strategy.
This will enable you to get into the real estate market for the right reasons. As an added bonus, the cash flow you can generated from your investment property can very well subsidize the rent you are paying to live where you want to live. It truly is a win-win strategy!