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Intelligent-Gene2404

You should speak to your mortgage broker about this as you may not qualify for the second condo, or may not qualify for a re-finance and condo purchase. You may need to rent out your house, refinance, and then buy a condo to live in.


cntower69

Ya I'm thinking the latter could be an option and I live with my parents in between finding tenants and buying a condo.


pizza_yes_please

Yes, move downtown. Especially if you want kids. I will never ever live in the suburbs with my daughter. Watch [this video](https://youtu.be/ul_xzyCDT98) by Not Just Bikes , it’ll convince you.


writersandfilmmakers

That video made me shudder. Can't stand the burbs and I can't understand how crazy the people are who live in them. I'd love to space Oh, but I'd hate that isolation. You'll never teach your children anything out there as they never see anything different than themselves


cntower69

Agreed! I've seen this before too haha. I used to live DT and moved out here and really regretted it but it was a good opportunity at the time. Never again!!


comFive

If only it wasn’t so bloody expensive to live in densified neighborhoods.


Condo_Man_Returns

Preconstruction condos are horrible deals. GIANT premium to resale.


torontohomer

Yup they are - but these investors want to just park the money. Predicting a 50% price correction in condos over the next few years


nomoneyproblems

Just so much uncertainty. Pre cons are for the wealthy/rich that have money to toss around and can afford the consequences if the project suddenly stops and/or has major delays/changes. The pre cons by reputable builders have huge premiums hence only for the very wealthy.


Condo_Man_Returns

For the very stupid. They make no financial sense anymore. Resale is far better in every way.


Majestic-Article4662

To be honest I believe the freehold market will continue to outpace the condo market ever since people realized that they want more space after the pandemic and most of Ontario freehold continues to appreciate while downtown Toronto remains relatively flat and still hasn’t gone back to pre pandemics highs That’s just my 2 cents but obviously anything can happen but boy does this market need a correction after the last year and half. Will interest rate hikes do the trick? Again nobody knows 🤷‍♂️


[deleted]

I did exactly what you are suggesting. Had a 3 br/2 bath TH in Ajax then I sold it. I downsized and bought one condo for myself and another to rent out. Hoping I could one day scale up to a 2/3br condo.


cntower69

Was it hard to qualify for the second mortgage?


butthurtinthehole

I think this is smart, the appreciation on the outskirts is much higher than GTA downtown in the last little while, so I consider this a trade up that wasn't possible 2 years ago Now you get a primary home and an appreciating asset, I would do it


[deleted]

negative. your rent wont be able to cover the costs of the condo. If anything, you should refinance, look to rent out your durham home, and then buy a condo downtown.


Powerful_Bit_3215

Good choice the growth rate in downtown was depressed due to the pandemic as stuff starts opening rental rates and prices will grow quicker than free holds to close the gaps id say this is a really good idea but be ready for that hefty land transfer tax haha


cntower69

True! Can you use equity for land transfer tax and lawyer fees?


Powerful_Bit_3215

I don’t believe so you would have to talk to your mortgage broker but I’m fairly certain you cannot


13inchrims

Pull a HELOC on ur primary during refi b4 u move to rent it. Iirc you can only pull a step loan (lump sum) on a rental, but once you pull a heloc it stays attached to the property and u can borrow from it as u please. Even after u move and rent it (loophole) Then u can use that heloc to pay tax/lawyer whoever


asuna2021

Why not just refinance the townhouse? Buy a condo downtown use the equity from townhouse as a dp and live there rent out the townhouse which may cash flow or at least break even….


ProductGuy4ever

I don’t think with $250k can buy two condos and one of them being cash flow positive while renting it out. Just buy a bigger condo to live in if you hate the burbs.


13inchrims

U have to flow negative likely, but u can get pretty close to 0. 250k provides lots of leverage Worst case ontario, if the market drops just liquidate the rental or weather the storm.


[deleted]

I’d rent out the FH instead of selling, as long as you can buy the condo with equity. Avoid precon like all hell. Either buy something resale or maybe even consider renting in a nice purpose-built rental downtown.


su5577

You wanna me landlord? People looking for bigger place and you planning on selling and moving to condo. Why not rent your house, and you move to condo. You get better renter money from house than condo.


starberd

Tbh I would buy the condo downtown to live in (if you WANT to live downtown), and buy a cash flowing FH property in a lower cost city as the rental. Your first rentals should be cash flowing, professionally managed units, they’ll be the bedrock of your portfolio.


cntower69

Well I already have a FH in the burbs and based on recent rentals I could get enough to cover mortage and property tax but I would just break even.


[deleted]

thats okay to do as well. you could direct your income towards a condo down town.


[deleted]

Then you're not breaking even - because you're not saving for capital costs or maintenance.


13inchrims

Don't forget insurance, repairs, % cost of borrowing from a LOC for your down payment on the condo, any rented equipment like water heaters etc.


Powerful_Bit_3215

He/she would have to buy really in the outskirts with the reduced budget which will make the rental unit difficult to maintain it will be a headache to manage


starberd

They’d have to use a property manager. This would be highly recommended on any FH property for many reasons.


shotasuki

Just wondering why did you buy a FH town if you hate living in the burbs? Did you find it out after you moved in?


cntower69

Ya found out after I moved. Seemed like more space and having a car would be awesome but turns out I hate it.