Who knows what a good investment property looks like?
To whom can you turn to get expert advice?
A realtor is a bit like a car salesperson. They know the sell sheet back and front, and can tell you which model fits your budget. But you’ve probably done your research before stepping foot in the dealership. You may already know what you want.
A property manager is more like a mechanic, who can tell you which vehicle will be best for you now and down the road. Which ones are cheaply made, versus made to last? Which will command the highest resale value? Working under the hood day in and day out, they’re in a position to offer such advice.
No mechanic wants to work on a lemon, either. They’d rather have you bring that car in for routine maintenance than for foreseeable failures.
As property managers, we’ve had our hands under the hoods of investment properties for over two decades. We know what makes them run smoothly, and which characteristics make for the best investments. We can also apply our expertise to enhance a property’s rental value performance for the better (aftermarket parts, you might say!).
In a hot real estate market like Toronto, almost any investment property will yield a return over time. But not all are created equal, and potential for ROI that can out-perform the market can only be seen “under the hood”. And you have to know what to look for.
A good example is brand-new condos, which hit the market with high rental rates reflective of pristine finishes and amenities. Older buildings, however, tend to be better situated and are generally more spacious. A smartly-executed remodeling of an older unit can attract a higher-quality tenant, and boost the investor’s return considerably. Lower-rise multiplexes tend to increase in value by two or even three times that of condo units, year over year.
Similarly, where an existing “bad tenant” might present a red flag to potential buyers and their agents, an experienced property manager has the expertise to change the situation, and convert a potentially underperforming property into a sound investment.
Steering clear of inferior investments is just as important as finding the “hidden gem”. Purchasing a brand-new Toronto condo as an investment is sensible enough, but it’s quite possible that your investment dollars could earn more for you elsewhere.