Condo Vs. House

It’s a simple question, but the debate will rage on and on.

And as simple and as seemingly-common as this question or topic is, I rarely get asked by buyers, “Should I buy a house, or should I buy a condo?”

My answer would vary, depending on a lot of factors, most notably, of course, price.

But even if you had an infinite budget, it doesn’t necessarily mean you’d live in a house.  Let’s discuss…

CondoVsHouse (1)

I bought my current condo about one week after I sold one of my best friends his current home.

Since everybody in Toronto wants to discuss real estate these days, I found myself talking to my buddy about our properties, when we bought – how long ago that seems now, and of course, what they’re worth now.

I was very blunt with him – I told him that I think my condo is up about 35%, and that his house is up about 60%.

We both put work into the properties, and we both got decent deals at the time of purchase.

Both are incredibly unique, and would be sought-after in the marketplace, so the only true difference here is that one is a condo, and one is a house.

And when I think about the money that he made, versus the money I made, and I look back at the last five years, I honestly wouldn’t change a thing.

Believe it or not, there is more to buying a house or a condo than just appreciation.

And I can tell you that while I had the financial means to purchase a house back in 2011, I simply didn’t want one.

I knew then what I know now – that a house will out-appreciate a condo, guaranteed.  But it didn’t change my thought process.

There are two recent phone-calls that I want to describe, which shed some light on the “condo versus house” debate, both in terms of the thought process a buyer goes through, and the factors that affect it.

I spoke to a 28-year-old on Sunday, who is getting married, and who wants to look for “a property” in the fall.  We discussed his current life cycle and his lifestyle, as well as his wants and needs, and favourite neighbourhoods, and then finally his price.

He can comfortably afford $900,000.

And after discussing his life cycle and lifestyle (which I won’t get into here), I told him, unequivocally, that he should buy a house.

On Monday, I spoke to a 23-year-old who has money from his parents (yeah, yeah, hate on him if you want), and after discussing his life cycle and lifestyle, I told him, unequivocally, that he should buy a condo.

Now for good measure, I’ll tell you what I told another couple the other day when they asked me about the “housing market in general, with condos and houses.”  Quite simply: “A house is always going to out-appreciate a condo.  A house is always going to be a better investment.”

So having fed you bits and pieces of those three conversations, let me flush it out for you a bit.

The way I see it, not everybody is concerned with the appreciation of a property to the point where that would make a difference in where they live.

Real estate is an investment, but it’s the only investment in which we live.  We can buy, hold, and/or sell stocks and bonds, but no investment is as unique as our primary residence.

In Toronto, with the massive yearly gains that we see, most people put potential appreciation at or near the top of their list.  But would you really let that effect where you live?  In what style?  In what neighbourhood?  With what amenities, transit access, parks, schools, and distance from friends and family?

When I spoke to the 28-year-old, I asked him, “Do you still party?”

It wasn’t silly, but I wanted to know what he was about.

He said that he and his fiancee were “old souls” and that they rarely went out.

He said they had grown tired of “the scene” years ago, and now they were ready to move on to the next phase of life.  They’re getting married, and they want to start a family soon.  They want to be in a good school district for when that day comes, and they honestly don’t care where they live – his search radius was literally “Front to Finch.”

He works at Finch, and his fiancee works from home, so the location doesn’t matter, and they don’t need to be downtown.

So with all that said, and a bit more during our conversation, I told him that he should absolutely target a house.

When I spoke to the 23-year-old, I realized that his parents would probably give him a million dollars in cash if he wanted it.

So there’s an argument to be made for just taking the money and running; buying a $1,000,000 house because the funds are available to him, but that’s not my place.

He’s currently living at home, and has one year under his belt at a very high-profile investment bank, and he’s currently working 80-90 hours per week.

He’s making a ton of money too, although as we discussed, money isn’t his issue.

I told him he should buy a condo, no questions asked.

This kid is going to do nothing but work for the next 4-5 years, and he needs a bed in which to sleep, that’s as close to his office as possible.

He doesn’t need a “better investment” in the form of a house, since he doesn’t have time to rake leaves, shovel snow, trap raccoons, hand out Halloween candy, trim tree limbs, fix a leaky basement, repair the roof, and do both preventative and responsive maintenance to the house.

If he bought a $1,000,000 house in Riverdale, or in the Beaches, he’d be on an ISLAND!

He’s 23-years-old.

All his friends, and all the people he’s going to meet, are living, working, and playing downtown.

Call me nostalgic, but at 23-years-old, you don’t even know who you are in this world.  Your 20’s are when you’re going to shape the rest of your life.  Where you live, and by association, where you work, will help determine who you’re friends with for the next few years, who you associate with, who you date, and maybe you you marry!

I would never tell a single 23-year-old, who is going to work 80 hours per week, at a job in the Financial District, to buy a 3-bed semi-detached house at Runnymede & Annette because “it’s a better investment than a downtown condo.”

This kid, based on where he works, can take the capital available to him and invest it in other vehicles.  He can buy a $400,000 condo, that meets all his true needs, and use it as his home base for the grueling demand of his job, and for whatever social time he does get.

It just makes sense.

And while I’m a real estate agent, I wear a lot of other hats as well.

I’m often in the role of a marriage counselor, or somebody who (tries!) to keep the peace…

And yes, I can be a life coach, as it pertains to real estate.

A lot of the 15 and 16-year-old kids I use to coach baseball are now in their early-to-mid 20’s, and I find myself giving them a lot of life advice, based on what I went through more than a decade ago.

One kid wants to rent, and asked me where he should look.

He works downtown.

He goes to bars and restaurants downtown.

He takes girls on dates downtown.

He goes to baseball games and concerts downtown.

So gee, let me me think…….where should he live….

If he got a “better deal” on a rental, should that affect where he ends up living?  I mean if he got 600 square feet at Yonge & King for $1,500, but he could get 700 square feet for $1,400 at Lawrence and Avenue, should he take the latter option?

I don’t think any of you would say “yes,” but then when it comes to buying as opposed to renting, your opinions might not differ.

I don’t want to sound like Jerry Maguire here, and suggest that money isn’t important.

But I do think that a lot of people are primarily concerned with the potential appreciation of their primary residence, and they haven’t stopped to think about where they want to live, in what style, with what amount of responsibility, and how all that is going to affect their lives.

Ultimately price is what dictates whether or not you can afford a house in Toronto.

I told the third couple from the stories above, that with their $550,000 price target, the decision has been made for them.

But I was honest when I said, “Make no mistake a house bought today will appreciate more than a condo bought today, and tomorrow, and the next day.”

And I always preface that statement, or follow it, with, “And I’m a guy that lives in a condo.”

But I do it for the lifestyle.

Yes, I could have made more money had I bought a house, any house, in Toronto, five years ago.

But all the time, energy, and money saved via living in a condo, to me, that was worth it.

So while I will admit that a house is a far better “investment” than a condo, and it will appreciate more, let me make an argument for living in a condo.

The property taxes on a condo are lower than that of a house, of the same value (this works in practice, not theory, because of MPAC).

The maintenance fees are NOT prohibitive as people think, when you consider your Toronto Water, Toronto Hydro, Enbridge Gas, home insurance, alarm system, landscaping, and the ongoing maintenance of a house, plus major expenditures like a new roof, furnace, hot water tank, A/C unit, or even larger expenditures like repairing the basement and waterproofing after an unforeseen flood.

But ultimately, in my opinion, it comes down to the lifestyle.

Condo living can be great, for some people, regardless of age.  Young people, middle-agers, and retirees alike can all see the value in the condo lifestyle.

I chose to live in a condo because I work seven days per week, and I’m out most nights until 10pm.  I simply do not have time to look after a house, and, I value the underground parking, the garbage chute, the 24/7 concierge, and other features of a condo.

Now those living in a house will also say they want the lifestyle – the front porch, the backyard, the friendly neighbours, the streetscape, and the fact that they’re NOT joined at the hip with 300 other owners.

We could make an argument for “lifestyle” either way.

But just remember that the “better investment” isn’t always the right answer, when it comes to real estate.

This is one of those times when there’s more at stake than simply money…


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  1. Laurie says:

    When I was preparing to find a property for my Grad studies, I absolutely went through this discussion with my Fiance, who was also working at the University. We had to decide if we’d want to stay. We ended up leaning towards the idea of a condo – for one, neither of us had time to tend to a house and for two we liked the flexibility of resale that came with an apartment. We scoured – he’s into open-source everything – and found out that not only is it free, but it put us in direct contact with the sellers. We’ll definitely sell our apartment on there.

  2. Toronto Boutique Apartments says:

    Great points on both sides here. One thing to keep in mind is that as an investment, condos are more flexible with a potential for higher incomes and cap rates. You can rent out a condo as a furnished apartment in Toronto for a much higher cap rate than a house, which can be more challenging to rent out as a furnished property. While the cap rates on regular condos can be just below 4%, it can increase to 6-8% when it is furnished and managed well. So yes there is definitely a lifestyle fit aspect to deciding which is right for you, but looking at the return is another way to look and analyze this.

  3. Darcy W says:

    Wow, some excellent points here.
    I was definitely one of those noobs who got all caught up in the trend of a loft lifestyle.
    But every time my agent took me to one, I was like, where are the walls? How come people can see my bedroom from downstairs?
    You really have to identify the characteristics of a loft to know which parts you like.
    I liked true high ceilings, well over 9 feet. I also liked the exposed features, concrete, tubes, beams, etc. I ended up going choosing a ‘soft loft’, which had some of these cosmetic features.

    BTW, my architect friend laughs at the term ‘soft loft’, and thus finds the term ‘hard loft’ redundant. It’s either a loft or it isn’t. A ‘soft loft’ is not a loft, it just deliberately incorporates some of the cosmetic features to give you such an illusion.
    I did see some truly unique loft buildings I liked (featured on mrloft dot ca) such as: The Merchandise, Brewery Lofts (a misnomer since it was never a Brewery but the old CBC warehouse), and Tip Top Lofts to mention a few.

  4. Teens says:

    People should not buy houses unless they are ready for the work involved. Loved living in a condo (renting) for a few years. That being said, I chose a house for my first owned property for a few reasons.

    1) It gives me options and flexibility. My house is detached and I can build on it, do a top-up, rebuild etc. to avoid the land transfer tax down the line. That is valuable to me. There is not many ways you can rejig a condo if life circumstances change and you need more space – then you’re forced to move.

    2) Like someone above said, the unknown of the maintenance fees turns me off condos.The costs that go into maintaining my house and yard are nowhere near the cost / square foot that many people pay in maintenance fees on their condos. Then again, maybe I’ve been lucky so far (have owned for 2 years).

  5. milo lai says:

    I think people need to actually realize what it costs to run a house with real life numbers.

    For many people the condo fees they complain about are very close if not less than a house. (you would get more space in a house though on average … especially when you include a basement) whereas you could not find a 800 sq foot house.

  6. Cool Koshur says:

    @Santiago, life throws many things at you which include change of jobs. Changing homes with jobs is not easy. Everyone’s requirements and needs are different

    Detached home is desirable over condos because they are proven to escalate better than condos. One key factor between condo vs house is “maintenance fees”. This keeps getting astronomically higher year over year and you have no control over it. For me, this is deal breaker

    1. AndrewB says:

      Condo fees aren’t getting “Astronomically bigger” each year. Hyperbole doesn’t make that true. Yes, condo fees go up usually every year, as they need to sometimes because of inflation. The reality is that people around the world live in condos and aren’t petrified about them because of maintenance fees. Many buildings are run well and having a good board can control costs. I’d worry about a building that never raised its fees, because at some point they’re getting a special assessment or they will have massive increases to fund renovations and building upgrades.

      Houses cost more to heat and cool, cost more in hydro, gas, and pretty much every other utility. There are plenty of unseen costs that can add up like structural issues, etc. People should live in what suits them financially and also by lifestyle.

  7. Santiago says:

    I know some people that had to sell his house (semi/townhouses) on the suburds ..yes .. Mississauga..because the commute was killing them..

    Obviously… too focus on space and not on the real needs…get closer to the jobs