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Posts filed under: Condo Investments

Investing: Mississauga Condos outperform Toronto condos in 2012

January 16, 2013 - Updated: April 18, 2014Condo Investments

    When asked, many people out there would assume Toronto would be the better condo real estate market to invest in.  The facts are both markets were highly supplied with existing buildings and new ones being completed last year. Yet, Toronto saw an overall loss in the average sale price in Q4 versus 2011 Q4 by -3%.  By contrast Mississauga condos average price increased by +1%.

    Also one has to look at how much it cost to invest to have a better understanding of the risks and potential rewards.  The average price for an investor of Toronto condos in Q4 2011 was $361,488 + $7237 Land Transfer Tax.  But the condo investor in Mississauga would have spent in Q4 2011 on average $258,252 + $2349 Land Transfer Tax.  Simply stated it’s more costly to buy in Toronto and I haven’t even talked about monthly costs of ownership.

    Considering the effects of restricted mortgage rules had on affordability; combined with an oversupply of condo units; Toronto seems to be an expensive option.  Mississauga condos market seems to be a little bit more resilient to the combination of factors that saw Toronto lose 3% last quarter.  Looking ahead into the near future in my opinion Mississauga condos will probably trend similarly as in 2012.  Toronto will probably still suffer from oversupply and higher costs.

By Todd Lee

Tagged with: investing in mississauga condos condos

How to make money with Mississauga condos

October 21, 2012 - Updated: April 18, 2014Condo Investments


   Regardless of your political beliefs and it has absolutely nothing to do with Mississauga condos, that's a funny picture and brilliant at the same time! Inevitably my clients always seem to ask me this to make money on Mississauga condos.  I understand their curiosity of course.  The need for greed is always driving us; though most people don’t buy Mississauga condos for this reason.  The typical buyer really just wants a place to live.  I suspect their need to know stems from not seeing living in a condo for the long term.  In my experience there are only a handful of ways people can “make money” with Mississauga condos.

   Flipping condos is a term to describe the exercise involving buying a condo, then renovation it and selling the property for a profit.  Sounds simple right?  Not so fast…if it was, then everyone would be flipping condos.  The obstacles can be quite expensive and time consuming.  But this is what has to be done.  First a suitable condo has to be discovered that has special qualities.  This condo should be in a desirable neighborhood and be bought at a low price.  Assuming you can find such a condo, and then you have to be able to renovate it to an upper standard with as little cost as possible.  When the condo is sold, the difference from the purchase price minus all the money that was put into buying, renovating and selling it represents the profit.

    Another popular way to making money with Mississauga condos is to rent the property.  Having a tenant is a nice steady way of helping you pay off your mortgage and increase equity. To do this right means selecting the right condo at the right price and being able to attract a tenant who will pay you rent without fail.  This requires marketing the condo to get interest from potential tenants, then going through a selection process.  The wrong selection can end up costing the Landlord financially such as missed rent payments and having to deal with a law suit to recover funds or going through an eviction process.  On the other hand, if things go smoothly then getting that cheque on the first of every month will make you smile.

    The third way to make money on Mississauga condos is to invest into pre-construction condos.  Essentially, buy the pre-construction condo with the minimum payments required as a down payment, then sell the condo before you take possession.  This is called selling the Mississauga condo by assignment.  The trick here is to sell the pre-construction condo higher than what you paid for it.  Take into consideration cost to sell the condo including any assignment fees owed to the builder.  If your take home is more than the cost of selling the pre-construction condo and the original purchase price you will realize a profit.

    As a general rule the more you can do yourself the more money you can save.  Then again if you are not experienced you will probably make critical errors in judgment that will cost you money to have someone else help you fix it.  Professionals can limit their expenses and see high returns in flipping, renting or selling pre-construction because they can do many things by themselves. The novice should employ professional s to the work they cannot.  The end result might be less profit, but at least you get a profit. 

    Thanks you once again for reading my weekly blog.  Should you have any questions or would like to learn more about this topic, please contact me at email:

By Todd Lee
Tagged with: how to make money with mississauga condos condo investment flipping mississauga condos renting mississauga condos pre-construction condos selling on assignment condos

Buying Mississauga Condos: It just makes Money sense.

June 30, 2012 - Updated: April 18, 2014Condo Investments


    My clients often ask me the question: is Toronto the best place to buy a condo for investment purposes?  It’s easy to see there are plenty high rises buildings in development as you drive along the Gardiner Expressway.  Why wouldn’t there also be lots of money to be made?  Otherwise, why are there so many buildings going up?  My quick answer is, yes. The Real Estate Market is hot especially for rentals or the investor might be able to cash in big by flipping.  However, there is a “but” to this answer.  With so many condos built and being built the market can get over saturated. The most recent information from TREB indicates just that, as year over year appreciation was lower for condos in comparison to other segments in the Real Estate Market.  This is not to say you won’t make money on condos, but maybe not as much.

    This is where buying condos in Mississauga comes in as a great opportunity for the condo shopper.  While not being Toronto, Mississauga is located very close to the centre of Canada’s financial center and all of its vibrant night life, restaurants, attractions, museums, university’s, shopping etc… are within driving or public transit range .  This is not to say Mississauga is a barren waste land either.  The fact is, Mississauga has a very diverse population, has a vibrant city centre, a lakeshore, sports stadium, a Performing Arts Centre, night life, restaurants, trails, parks, great schools and is also home to the busiest Airport in Canada and to 61 of the Fortune 500 Canadian companies. Mississauga in essence is a mini version of Toronto but is also debt free and does not seem to be hit routinely by strikes and protestors.

   Investing into Real Estate is just like any other business venture.  Costs of investment and the potential return have to be studied and analyzed.  Let us examine the statistics posted by The Toronto Real Estate Board for the quarter one of this year.

The average sell price to list price for condos is around 97%-98% in Mississauga and Toronto.  We will simplify the comparison by just using the average list price for condos.  In Toronto, the average list price for a condo for Q1 was $360,892.00 while the average in Mississauga was $254,584.00.  What this means is on average the condo buyer will spend about $106,000 less to buy in Mississauga which obviously represents a cheaper cost.

Figure1.  Summary of Condo transactions created by TREB.

    If we focus on just the Toronto downtown core we also see the most popular units sold are one bedroom and one bedroom + den.  This segment of Toronto does represent the average price of condos listed.  By comparison, in Mississauga City Centre the most popular units sold are; two bedrooms +den and a close second place, two bedrooms and 1 bedroom +den.  The average of these units dose represents the average list price of condos in Mississauga.  Clearly, being able to purchase a bigger sized unit in Mississauga represents a greater value!

Figure 2.  Summary of condos sold in Down Town Toronto.

Figure 3. Summary of condos sold in Mississauga City Centre.

    Now let’s examine the percentage of appreciation for condos.  TREB lists the first quarter 2011 average price in the city of Toronto as $348,779.00 and for Peel Region (Mississauga represents the vast majority of condo sales in this region.  TREB did not collect data far back enough to see Mississauga’s exact numbers) $231,010.00.  As well, the average price in Peel for quarter 1 2012 was $246,688.  Doing the math the appreciation results from quarter to quarter looks like this:

Figure 4.  Condo Market Summary created by TREB.

  • Toronto condos + 3.5% in value.
  • Peel region condos +6.7% in value.

    The conclusion should be made that by percentage, appreciation of condos in Peel and more specifically Mississauga and Brampton is higher than in Toronto by almost double.  This also indicates a possible trend that wise investors are leaving Toronto for greener pastures west of the city.  One probable reason is the land transfer tax situation in Toronto.  It’s been well documented in the media that buyers are seeking other opportunities to invest their money as the cost of Real Estate is getting to be high in part, because of this tax.

    As an example if the investor (not a first time homebuyer) were to buy the average priced condo in Toronto they could expect to pay $7200.00 in Land Transfer Tax.  OUCH!  By comparison if the same investor were to buy a condo in Mississauga for the same price the Land Transfer Tax would only be $3888.00 thus saving $3,312.00.  Take also into consideration the average condo in Mississauga is cheaper and bigger than in Toronto.  If we use the average condo price in Mississauga, the result is $2294.00 of tax payable, representing a savings of $4906.00 in Land Transfer Tax versus Toronto condos!

    Another aspect of investing into condos is the potential to make rental income.  The goal for any landlords is to make money.  Thus, it’s very important to charge a tenant a rent which covers all of their investment expenses or even exceed it.  In reality most are not successful in reaching this goal, but are rather satisfied to have their tenants help to pay down the mortgage while covering the cost of condo fees and utilities.  The appreciation in value of the condo over time plus the accumulation of equity without having to put up all the money themselves can still be lucrative in the long run.  The key to renting is simple.  The Landlord must have a reliable tenant and any vacancy will add to the expense of the investment property.

    Let us have a look at the vacancy rate for condos in Toronto vs. Peel as per CHMC, 2011 Fall Rental Market Survey.  We can see the rate in Toronto is very disproportionate at 1.3% in comparison to Peel which is at 0.3%.  The disparity can be explained by perhaps the type of tenant.  In Toronto one bedroom condos is king for sales.  If we assume many of these are being rented to business clients or students, it’s less likely they will stay long term causing the Landlord to fill vacancies with more regularity.  We know the two bedroom +den is king in Mississauga which can mean young couples or small families are renting, thus are more likely to stay longer meaning less vacancies.

Figure 5.  GTA Condo Vacancy Rate

    The last factor to consider is the cost of financing your investment.  The Federal government hinted that in the first quarter of 2012 that interest rates will probably increase this year. They also made it clear they think certain Real Estate Markets were too hot and perhaps growing without following the fundamentals.   Since the early part of the year when this was stated, some things around the world have changed.  The Euro market was in turmoil.  Now the European Union has made some changes to protect hard hit Euro economies making markets around the world more confident and perhaps negating the need to raise interest rates so soon.  However, the Feds still want to control the debt levels that Canadians are taking on.  The Feds response was to change the Mortgage rules to make it more expensive to borrow for Real Estate. They took away 30 yr. amortizations so the maximum is now 25 yrs.  To illustrate I will give an example of a monthly mortgage payment for $500,000.00 amortized by 25yrs and 30yrs.

  • 25yr mortgage = $2104.08/month, also requires an income or at least $78903.00/yr.
  • 30yr mortgage = $1902.07/month, also requires an income of at least $71328.00/yr.

    That $300 makes a huge difference in affordability as the buyer would have to make at least $7600 more a year.  Therefore, investing in Mississauga condos, the more affordable option puts you the investor at less leveraging risk.

    Another factor to consider when determining your potential to buy is how much down payment you can afford.  Assume you want to avoid the CHMC insurance fees for high risk mortgages.  You will need to have 20% of $360,892 for the average condo in Toronto which works out to $72,178.40.  In Mississauga the 20% down payment for the average condo would be $50,910.80.  In other words, you could save $21,267.60 by investing in Mississauga.

    Ultimately as a condo investor you have to ask yourself the questions…Do you prefer a rate of return of 3.5% or 6.7%?  If you are buying the condo to live in or rent would you rather have a 1 bedroom or 2 bedroom +den?  How often do you want to find Tenants?   How much can you afford to be leveraged without going into financial disaster if things don’t work out the way you had hoped?  How much down payment do you have?  After reading my blog I think you will be better prepared to answer that question yourself.

Thank you for reading my blog and as always if you are interested in my Real Estate services please don’t hesitate to contact me at:

*All statistics and charts are from the Toronto Real Estate Board.

By Todd Lee

Date posted - 30/06/2012




Tagged with: todd lee mississauga condos buying renting investing city centre brampton peel toronto condos

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