Toronto Developers get Creative with Condos
Just this morning we talked about the climbing number of condos in Montreal. In that post we talked about how sellers are going to have to start listening to the market, and bring their prices down. In Toronto though, it’s a different story.
Here developers have already built their condos, and many have been left holding the bag ever since the market started to cool and there have been fewer buyers on the market. It’s this dilemma that has motivated many Toronto developers to become very creative with their Toronto condos, and to start allowing people to rent them and buy them at the same time. It’s all through a simple rent to own program.
The Toronto Cinema Towers are just the latest project in many that have turned their “Buy Now!” slogans into “Rent now, buy later!” by promoting their newly built condo units as rent-to-own homes.
Although this project is still under construction, future homeowners are welcome to apply to rent one of the units. If their application is approved, they will provide a rent cheque every month, along with a deposit that will be used as their down payment should they decide to purchase the unit in the future. While paying rent, a portion of it will be put aside to build onto that down payment.
After one year, the tenant will have the option to buy the unit outright, and will owe any remaining money for the unit at that time.
The rental/purchase agreement is very similar to what any buyer will find when looking for a rent to own home. And it’s also a way for developers to recoup any losses that they would otherwise face in today’s dwindling Toronto market.
It’s very interesting, actually. While investors have always been known for getting creative with their properties, it’s traditionally been the role of the developer to simply get the structure up, and then let the buyers and sellers sort it out as they will. Now with developers also donning investor caps, it could mean good things for Toronto.
One of the positives that is sure to come out of this, especially if even more developers start getting creative and jumping on this trend, is that will loosen up the extremely tight rental market in Toronto right now. With more available properties on the market, all landlords, not just developer-landlords, will have to adjust to that increase, and it could help stabilize rents in the Toronto area.
Finally, a story about the number of condos in Toronto, and how they might actually help Torontonians!