#GTAHomeHunt is a weekly Star series that delves into the details of real estate listings in Toronto and the greater Toronto area. Do you have a tip? Email us at [email protected]
Price: $ 329,000
Neighborhood: The Annex – University of Toronto
X Factor: This studio near Bloor and Spadina is available for a price almost impossible to match in the area. Listed well below market value, it provides an opportunity for someone to live in the city for a reasonable price, without sacrificing quality or space.
The unit includes wall-to-wall windows, a large balcony, and an unobstructed view of the city. It has an open and spacious layout and includes a newly renovated kitchen with new appliances and cabinets, as well as new laminate flooring and an updated bathroom.
So what is it that makes this home so affordable? We spoke with two experts, real estate Othneil Litchmore and real estate attorney Martin Rumack to find out.
Why is it priced at this price? At 720 Spadina Avenue, this co-owned unit is less than 500 square feet. Similar-sized singles in the area average about $ 500,000, Litchmore says, putting this list price about $ 200,000 below average.
While maintenance fees are approximately $ 530 each month, the cost includes property taxes, due to the co-ownership structure. Utilities are also included in the maintenance fees for this home.
In all, the price is reasonable and not as high as it initially appears, says Rumack.
Co-properties are established differently from condominiums and cooperatives. Instead of buying a condo unit or buying a stock, co-ownership buyers get a deed with a percentage of ownership of the entire building, Rumack says, and with the deed comes exclusive rights to live in one unit. Add that the percentage of ownership will correspond to the size of the unit. For example, someone living in an 800-square-foot home would have twice the interest percentage as someone living in a 400-square-foot home.
Different co-properties will have different rules, but interested buyers may need to be approved by the building’s board of directors before they can secure the property. In some cases, if the co-owner wants to rent their unit, the board may need to approve the tenant, Rumack says, and they are likely to look for signifiers of financial stability.
The board of directors is made up of elected members who set the rules and regulations for the building and are intended to represent the interests of the co-owners. They are generally not much different from the types of rules that would be in effect for a condo building, according to Rumack.
Co-properties tend to be in older buildings and generally provide more space for a lower price than condos, Rumack says, though he emphasizes that co-ownership prices have risen in recent years.
Also, almost no bank will finance a mortgage for these types of properties, he adds, saying that co-properties are not common enough for banks to be interested. Instead, he says potential buyers should look to credit unions.
In this unit, Litchmore notes that “the design is far superior to things that cost $ 100,000 more.”
Unlike many downtown houses on the market, he says this building is geared toward the interests of its residents.
“This was built for people to live,” says Litchmore. “It is not just a plan to make money.”
Tips for finding places like this? Rumack suggests that buyers interested in co-owned or similar cooperative homes look for real estate agents or attorneys who have a lot of experience with these specific property structures. Most of the time, he says, real estate agents don’t know the benefits and drawbacks of these homes and can discourage potential buyers from exploring the option.