Wednesday, April 16, 2014

Lost in the Toronto Bermuda Triangle

We are back in Toronto, subject of my previous post on the Bermuda Triangle, looking for a home.

We finally saw some condo units that might work, but the prices were very high:

  1. Ground level 1600 sq ft unit (2 bed+den) for $1M in nice area.  In Toronto, no one has to stage their home, so we saw all the family pictures also in another unit, an old cat with a smelly litter box.
  2. New 1500 sq ft unit (2B+D) for $1.2M with view of Humber River but the building is still under construction.  On top of this, I believe you have to pay the $40000 land transfer tax and some other bits and pieces for a total of $1.25M.  The saleslady was completely obnoxious until our realtor had a word with her.  The carrying cost would be about $66K per year including taxes, maintenance fees, opportunity cost of money invested @ 4%.
  3. Same building as 2., but rent the same apartment for $4500/mo = $54K per year.
In contrast, here are some other options:
  • Stay in a suite hotel (Embassy Suites type) for $1000-1500 per week as needed.  $55000 cost per year max.  Includes maid service, gym, pool..
  • Stay in furnished apartment at $5000 per month, $60000/year.  Probably has gym, weekly maid service.
  • Unfurnished rental at about $3000-4000 per month, $35,000-$50,000 per year.
So my opinions are that the market is still crazy.  It is cheaper to rent than buy, maybe even cheaper to go for a short term rental just for the nice months when you want to be in Toronto (May-Oct).

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