I Would Never Buy This Type Of Condo

Added: 2026-06-03

[00:00:00]I'm worried about these type of condo buildings. I really, really believe that these will perform the worst over the next decade, and it's not just necessarily price. I'm just talking about like actual true experience of living there. Now, if you're an investor watching this, you can probably just go fine. But, if you're an end user, this is probably who this video is actually going to be the most valuable for because on the surface level these buildings look great. They're pretty new. The views are good. The location is great. And for renting, I think they're actually like really, really strong options. But, I just feel like there's a lot of things on the surface level that you can't see with these buildings. I'm going to walk you through what to avoid and give you an alternative. My name's Tom Story. I run a real estate team here in the city of Toronto, and we've been number one in condo sales and top 10 in total transactions in the last two years specifically, and we do this a lot. And when we're meeting with new buyers, a lot of people want to start the search.

[00:01:07]They're like, "What about this building?

[00:01:08]What about this building?" I And there's like there's all these things that we know from doing this every day. And someone that's just starting the search just wouldn't know. So, if you learn anything new in this video, give it a thumbs up. I'd appreciate it. Get subscribed to the channel. If you want to talk with our team, go more specific into your situation, you can book a call with us in the first link in the description. So, let me get straight to the point. The buildings that I'm worried about are pretty much any condo that was built in the last 10 years. And not because they're mostly glass. I think it's going to fall off or not because I think they're going to become ghettoes. Like, that that's not the the reasons why. It's mostly just because if someone's buying a condo to actually live in, these would be like number one buildings on my list to avoid for so many reasons. So, I would classify these as investor buildings. And essentially, if they were built in the last 10 years, this is the process on how they became a condo. Developer launched a project focused on selling it to investors.

[00:02:04]That's the easiest way to get you to 70% to get your construction financing. Then they put a shovel in the ground and they built it. And when this building registered and became a real condo, tons of units went up for rent and that's it.

[00:02:16]And it's a new building and and that's basically what's happened for the last decade. Simply because like these were never really sold to end users. What end user wants to wait four or five years to actually move into a condo when you have resale options that are better priced anyways. And because of the way that they were built, what naturally happens and why these are classified by me and many others as investor condos, is that 80 to 90% of the building is rented out.

[00:02:42]So, let's start there. If I'm looking to buy a condo to actually live in and I had a choice between a building that's more owner-occupied or more rented out, I would choose the owner-occupied building. And I want to be really clear with this.

[00:02:57]I'm not saying the renters are the problem. That's actually not what I'm saying at all. Now, I do think like generally people treat things they own better than things that they rent in life. But that's not where I'm actually going with this.

[00:03:09]I think it's more of an issue of who owns the condo. So, if 80 to 90% of the building is owned by investors, that will complicate things down the road.

[00:03:18]And the first complication is this, any of these buildings were built like in the last two to three years, unless these investors bought these cash, a lot of them already are worth a lot less than they paid. The mortgage might be higher than the actual true market value. And because of where interest rates are at today, they might be losing money on a monthly basis. So, just like starting out, if even if it's like only 30% of the building that's actually in that position, that's still like a lot of people that are losing money. And I can tell you from running this YouTube channel, from being really active in the Toronto condo market. I get weekly calls of people saying, "How long till I can sell this thing and not take a massive loss?" So, they're not thinking long-term. They maybe thought they were going to buy this to just flip it, and they quickly realized that's not going to happen. There's no flipping cuz there's no money to be made. "How long can I kind of take this loss on a monthly basis till I have to sell this property?" So, that's kind of that's an issue for me. I don't want to own in a building that has people in that position cuz then tons of listings are eventually going to hit the market, and then it's just a race to the bottom in pricing. And for resale value, for me buying a condo, I'd rather be in a building where units aren't always up for sale. One or two, you know, at a moment in time that makes sense.

[00:04:35]15 listings for sale, and five of them are the same floor plan, and the only difference is price? That's so hard competition-wise when you're trying to sell them in the future. Let alone that they're going to stay on the market longer cuz a lot of the units are rented out, and at least in these market conditions, people don't want to buy properties that are currently tenanted.

[00:04:53]What also tends to happen is that when these buildings are registered, tons of units go up for lease at the same time.

[00:04:59]It's kind of the same idea. It's like, "Well, just price it the cheapest to get someone in there right away. You don't want a vacant month. It's better to at least it out for $100 less than have 60 days of vacancy paying a mortgage, property taxes, and condo fees." So, I have found, and I've seen this first-hand over the years, that some landlords that bought investments in these buildings are willing to take the chance on a tenant that's like not maybe as qualified as they should be just cuz they're worried about it sitting vacant cuz the clock is ticking. You add on to that that a lot of these units are smaller, naturally smaller. Like, they're not all under 500 sq ft. There's obviously larger units as well. But, percentage-wise, there's more smaller units in these type of buildings than there is in kind of like I still think my sweet spot for condos is like 12 to 20 years. That would be like my zone of like you know exactly what you're getting. No issue buying something older than that if it's been maintained the right way. It's just like the last 10 years stuff I'd be hesitant. I'm not saying I would never buy in these buildings, but it's something I'd I I it would have to really make sense price-wise and maybe like an amazing view and in area that you really want to be in versus buying something that's arguably going to be less expensive, bigger floor plan, probably has a parking spot that could be literally across the street. With these investor style buildings as well, a lot of the time you couldn't even get a parking spot unless you bought a two-bedroom. So naturally because of that, a lot of these smaller units, one beds, one plus dens aren't going to have parking. We've seen this very clearly in the data that units without parking are harder to sell. You add in the fact that a lot of these units might be rented out and if they're trying to sell it with a tenant in it, you add those two things together, it just creates a lot of hurdles for you as a seller. And if I'm thinking about buying in a building like this, I don't want to be competing with that when I'm trying to sell my own property versus an investor that's not as involved. It's like maybe the third condo they own and they're like, "Whatever. Like I'll take the loss and I'll sell this thing and move on." But then that sets the benchmark for the last sale in the building. Another big factor is maintenance fees. These developers will sell you on the fact that the main- maintenance fees are only going to be this much per square foot. I have never seen a building that maintains that. It's like once the building registered as a true condo and the condo board is put into place, that's like the first thing that happens that fees jump up pretty significantly in those first five years. Now, not always, but I've seen this happen time and time again. So, there's just less certainty that the fees aren't going to change at the beginning stages of a building versus buying something that's been around for 10, 15, 20, 25 years where it's like you have proof of what the fees have or have not done over a longer period of time. And with these newer buildings, less is covered in the maintenance fees. So, some older buildings like everything's included.

[00:07:51]Hydro, water, everything. Some of these new ones, you're paying for a heat pump, you're paying for water, you're paying for hydroelectricity on top of the maintenance fees. Where older buildings, more are included in those fees. I think you get kind of the point of where I'm going with this video. I just think like if you're buying a condo, go watch my stamp formula video. I think that's like that will really help you make a better decision in terms of like the criteria you should be looking for. But being able to think about the potential resale value and not just if the condo is going to go up in value, but like is it a type of property that's going to be in demand in the future. And my final point with these buildings is that if they're 80-90% owned by investors, the condo board theoretically could be made up of like absentee owners. Right? So, like that again, I'm not that's not like a blanket statement that that's the fact with all these buildings. I'm just saying like, you know, look at how these buildings were built and look at who owns them. And that's just going to be a thing. So, are there some circumstances where buying in these buildings make sense for end users? Yeah, of course there is. There are great buildings been built in the last 10 years that we'd still recommend to clients. But for the most part, I think there's better options. And if it were me buying for myself, helping a family member, like making decision based on all the things that I've seen and how the market's played out, they probably wouldn't be my first choice. Even though on the surface level, it's like, hey, it's bright and shiny and it's new and it's got a good view and it's located well. Like why wouldn't I buy this one? Well, hopefully this video cleared it up for you. My name is Tom Story. Thanks for watching and remember, home is where your story begins.