Cash Flow and Condos

[nigelwray1982]

I've heard that Condos dont cash flow very well for a number of reasons, one being the high condo fees. After reading this article http://www.moneyville.ca/article/1283748--rental-condos-new-bidding-war-battleground

Do you think these condos cash flow adequately? I cant help but think they would, no?

 

[Thomas Beyer]

Cash flow is a function of the mortgage level, ie leverage. What is the price per sq ft, and what is the rent per sq ft ? Condos fees ? Taxes ? Management fees ? Many cash-flow, many don't. Be very specific please. Vacancies might be low today but might go up. Personally I would not buy a condo in Toronto right now, unless for personal use, and then not a shoe box of less than 900 sq ft.

See this article, too: http://www.edmontonjournal.com/business/real-estate/Calgary+Edmonton+displace+Toronto+Vancouver/7504861/story.html

 

[Sherilynn]

It also depends what you do with it.



We had a condo that was barely cashflowing (by my standards) by the end of the recession, despite decent LTV and low condo fees. We weren't happy with the tenant profile for the area at the time (since nicer places elsewhere were now cheaper, we weren't able to attract the same tenants that we we used to). So we had some minor upgrades done and turned it into a fully-equipped supersuite, subsequently increasing the cashflow about ten-fold and attracting higher quality tenants.



Of course, I wouldn't recommend this for every property or for every landlord.

 

[nigelwray1982]

Thanks guys.