Should I buy a parking spot with my pre-construction condo is something we get asked about quite frequently. Regardless if you’re an investor buying a pre-construction condo to flip or rent out, or a first-time-buyer looking to purchase a new condo, this is something you’ll likely need to make a decision about.
There is no straightforward yes or no answer to this question. There are many variables that come into play as you consider parking or no-parking to go along with your suite that you plan to purchase. The simple question might be “do I have a car?”, and if the answer is yes, then the logical step is to purchase a spot. If the answer is no, then don’t. But it’s actually not that simple.
Can I Buy a Parking Spot with my Pre-Construction Condo?
Your decision about a parking spot may be already pre-determined for you by the developer. Many developers are now only offering parking to certain size units and up. So, as you’re looking into making a purchase, ensure you know everything about what you can and cannot add on, based on your unit size.
Many studios and one-bedroom units do not include an option to purchase parking until all of the larger units have been offered. If at the end of the sales period there are still some parking spots available for purchase, then and only then will you have the chance to be considered. This isn’t exclusive to all pre-construction projects but if you’re looking at developments that are on the larger scale with 20+ floors, you’ll likely find yourself in this situation.
Investors: Things to Consider
If you’re planning to invest in a pre-construction condo, you should be thinking about parking and how that strategically fits into your overall investment plan. Some criteria to help you make your decision includes:
- Small Units: If you’re purchasing a studio or a one-bedroom condo in downtown Toronto to hold and rent out, or even flip, we would say parking isn’t an absolute must, but a nice to have.
Your tenant or buyer will likely be renting or buying their first condo and looking for the most affordable option. Adding a parking spot will only increase the price and perhaps price you out of some first-time buyer budgets. - Large Units: If you’re looking to invest in a larger footprint such as a two-bedroom or bigger, we highly recommend adding a parking spot to your agreement. Those looking to spend on larger units will most likely have a car, so a spot could be a make-or-break when it comes to renting it out or flipping. Don’t be caught without one if you’ve got a bigger condo in your sights.
- Access to public transit: If the development you’re buying into is in downtown Toronto, you’re likely very close to the TTC and therefore your tenant or potential buyer will have direct access to everything they need in the city.
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End Users: Things to Consider
If you’re thinking about making a pre-construction condo purchase to move into, you’ll still need to consider adding parking to your purchase agreement with your developer. The first question is of course “can I purchase a parking spot?” followed by, if so, “how much is one?”.
Sometimes, regardless of the size of your unit, some parking spots are simply too much money. Take for example The Well, located at the corner of Spadina and Front Street. A parking spot in this building would be exceptional to add to your condo purchase because even if you don’t end up using it with your own car, you have the potential to rent it out. But at a whopping $90,000.00, and availability to those units $1,000,000.00+, this option might be totally out of your price range.
- Are You a Car Owner?If you’re an end user, and you’re able to purchase parking and can afford it, the next logical question is will you own a car at occupancy or in the near future? If the answer is no – you’ll never own a car because you live in downtown Toronto and don’t foresee a need for one, then you may opt out of the parking conversation completely.
Many people that live in the city don’t have a car and don’t plan on ever owning one. If that’s you, you have the opportunity to put that extra money towards a unit on a higher floor, or one with a better view. - 2-Bedrooms or More? Get the Parking: Even if you fall into the camp of “I’ll never own a car so why bother?”, if you’re purchasing a unit that’s at least two-bedrooms, you need to get the parking. Think about resale value and your potential buyers a few years from now.
If you don’t plan on using your parking spot, you can always consider renting it out – parking in highly sought-after buildings are a hot commodity so you could be making extra bucks each month by renting it out.
Parking in downtown Toronto isn’t going to get any easier, especially with the predicted population growth and young professionals coming into the city to start their lives and careers. Purchasing a spot with your pre-construction condo may seem like a no-brainer, but we strongly suggest considering these options before making your final decision.