# What do I need to make to afford living in downtown TO?



## MasterCard (Aug 2, 2013)

Not that I am considering buying a condo there, but just playing around with the numbers so far and here's what I got.

1 BR condo: $1450/mo*
Maint. Fee: $350/mo**
Property Tax: $175/mo***
-------$1975/mo---------
Food: $250
Cable/Internet/Phone: $120
Transportation: $120 (this is assuming I don't even have a car and just buy a bus pass!)
Utils: $100 (sometimes it's included sometimes it is not)
-------$590/mo----------

Total: $2565 --> *$2600/month*

These figures seem about right?
Haven't accounted for any discretionary spending at this point...
What* % of your monthly income* should be spent towards housing?


*$350K condo, 1BR, 20% down with 25 yr amortization, 1 yr closed at 3.75% (I pulled this rate out of nowhere). This number should be $1400-$1600 depending on which rate you choose for the most part.
** seems to be the norm for downtown based on my limited analysis
*** I'm seeing $2k/yr for the most part


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## My Own Advisor (Sep 24, 2012)

Make sure you factor in inflation, re: condo fees and property taxes. We used to live in a condo in Ottawa, our fees went up every year, between 3-5%.

We got out because of that. At the end, after about 4 years living there, we were paying over $400/month in condo fees.

That's a nice 2-week trip somewhere every year.

I think we spend about 40% of our net income on housing, but we're also close to doubling up mortgage payments to kill the debt sooner than later in this low-rate environment. If rates go up and we're debt free, I'll be very, very happy.


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## Spudd (Oct 11, 2011)

Make sure you look at older condos to get an idea of the fees. If you buy a newly built condo I hear the developers often set the fees low to encourage buyers, and then after the owners take over (after the first year) the fees jump. 

Don't forget about home insurance as well.


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## nahc (Feb 22, 2011)

I think the condo market will not do well in Toronto. Disclaimer, I used to have a condo in downtown TO right next to the hospitals before selling it a couple of years back. If you redo the math as a renter, you'll find it infinitely more affordable.

1 BR condo rent: $1450/mo
(nixed Maint. Fee: $350/mo -- paid by landlord)
(nixed Property Tax: $175/mo -- paid by landlord)
-------$1975/mo---------
Food: $250
Cable/Internet/Phone: $120
Transportation: $120 (this is assuming I don't even have a car and just buy a bus pass!)
(nixed) Utils: $100 (usually paid by landlord)
-------$590/mo----------

Total: 1940$, and then you can save 600$ towards whatever, including a down payment on house when you want. Plus you're mobile! 

I lived in the downtown TO for a while, making 50k a year with an average hour wage of something like 3$ an hour when you counted all the hours... its doable but not pleasant.


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## Cdnwife (Sep 10, 2013)

Spudd said:


> Make sure you look at older condos to get an idea of the fees. If you buy a newly built condo I hear the developers often set the fees low to encourage buyers, and then after the owners take over (after the first year) the fees jump.


This was what happened to us. After the first year we ended up w a special assessment and a jump in fees of 35%. Turns out the budget for gas for the common hot water, phone lines for the intercom system, and electricity to heat common areas was grossly under estimated by the developer thus the increase. However since the. We have not required an increase in fees, however we are very careful where we spend our money. Building is now 5 yrs old.


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## Pluto (Sep 12, 2013)

Too, along the theme of looking at older condos, new condos are untested in terms of will they leak and need remediation? Find out how much money the strata has saved for emergencies. If their funding is low, you can be sure your fees will go up. Then if the building meeds repair, it can become unfordable. Lots of condo owners have waked away with nothing after being faced with a huge remediation bill. 

And don't count on rising prices. Prices could stay flat for many years. Lots of time to save a bigger down payment before the next big move up in prices.


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## DividendLuvr (Mar 5, 2014)

From my research, the best time to buy a condo is when the building is between 5 and 8 years of age. By this time, the condo fees will have stabilized and any initial special assessments (post-build) will likely have taken place.


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