In Toronto, parking comes at a premium. That’s why condo owners should think carefully before passing up a parking space. If you’re deciding whether to purchase one, there are a few things you should consider.
Of course, your choice is more complicated than whether or not you own a car. There’s also your condo’s resale value, and the costs and rental opportunities associated with owning a spot. So let’s talk about the pros and cons of purchasing a space.
How valuable are parking spots in Toronto?
More and more Torontonians are choosing to forgo owning vehicles in favour of cycling or taking public transit. You may fall into this camp. If you do, you’re probably questioning whether it makes financial sense to buy a spot.
On the one hand, the number of potential condo owners who don’t need a parking spot is on the rise. On the other, condo developers are creating fewer spaces than they used to. Most condo buildings have fewer spots than units, which has turned these patches of concrete into hot commodities.
According to one source, West Queen West development The Plant charges $50,000 per parking spot. Upscale downtown buildings can charge even more—like Nobu Residences, where spaces have sold for a cool $80,000.
As a condo owner, can you capitalize on this trend—and is doing so worth the effort?
Your parking spot as a source of income
If you’re considering buying a parking space you won’t personally use, remember that there are a few ways you could use it to make a profit. Consider the following four scenarios.
1) You can rent or sell your space to a fellow tenant.
2) You can rent your space to someone who lives or works in your area.
3) You can get more money for your condo when you go to sell it.
4) If your condo is an investment property, you can rent it out to your own tenant separately (or increase the rent you charge based on the inclusion of the space).
It’s also important to note that condo bylaws may prohibit you from renting or selling your space. In some cases, you may only have the right to rent to residents in your building. Be sure to ask management before you take any steps that could land you in hot water.
What you’re able to do with your space may also depend on whether you legally own it or not. When in doubt, check your unit’s status certificate to determine whether the spot is yours.
Things to consider
So, how do you know if purchasing is right for you? There are a few factors to keep in mind. First off, you’ll most likely be paying for more than the sticker price if you decide to purchase a space. Make sure you understand any additional taxes and maintenance fees that apply.
Also, think about factors that might impact demand for your spot. Where is your building located? And is it an upscale development? What are the lifestyles of your fellow residents like?
For some tenants and residents, parking can be a deciding factor when it comes to moving into a building. For others, it’s not important. If you’re considering purchasing a space for reasons that are purely financial, envision your most likely tenant. If they have a vehicle and can easily afford parking, buying a spot could be a very good investment.
Looking for the right Toronto condo? Whether you need parking or not, we can help you find the perfect building. Get in touch, and let’s talk about it!
