More condos are coming to Markham. This one will be at the southwest corner of Bur Oak avenue and Markham Road, right across the Mount Joy Go Station. Located in its own block of mid-rise condos and townhouses, immediately north of the “Art House” condos at 9582 Markham Road and “The Mark” condos at 9560 Markham Road, Aspen Ridge is building Margo Condos as part of its “Union” community.
Margo Condos is set to have a total of 113 units combining condo suites and a selection of townhouses. It’ll be located at 1735 Bur Oak Avenue, next to sold-out mid-rise condos and townhouses also built by Aspen Ridge.
I’m waiting for price lists and floor plans, but as the final phase of its Union project, I’m sure there is a lot of anticipation from buyers looking to downsize to a Markham condo, or young individuals and young families who can’t quite afford a freehold home in the area.
But will it be worth waiting for, when you can already buy resale condos at any of the nearby ready built condos?
Currently, one bedroom condos at 9582 Markham Road are listed from the $379k’s and into the lower $400’s. A two bedroom can be had for $519k. Recent sales at this building range in the mid $300k’s for one bedrooms, low $400k’s for a one plus den, and low to mid $500k’s for two bedrooms.
One bedroom condos at 9560 Markham Road are listed from $429k and you can have a chance at a two bedroom at $499k (though the highest two bedroom is currently listed just below $600k. Condo suites in this building are being sold on assignment, but sales by the builder’s brokerage show similar values as its next door neighbour. One bedrooms selling for mid $300k’s. One plus den just a touch below $400k’s. And two bedrooms just breaking the $500k’s. That works out to about low to mid $600’s per square foot (obviously a much lower sales price per square foot than buying a condo in Toronto).
Upper Village condos by Great Gulf at 9500 Markham Road and 9506 Markham Road are also offering similarly priced units, with one bedroom plus dens currently in the low to mid $400k’s. But two bedroom suites are starting from the mid $600k’s. Recent sales show one bedroom condos fetching prices in the high $300’s to low $400’s, one plus den’s in the low $400’s, and two bedrooms in the low to mid $500k’s.
Margo Condos will likely enter the market at the high $600’s to low $700’s per square foot price range, anticipating an increasing demand in Markham condos in Wismer not to mention no more building space for further condos at least in this immediate area (unless the automotive and industrial properties across the street sell out to condo developers).
Should you wait for Margo Condos and buy a new condo, or should you buy a resale condo instead?
It really depends on what you want. If you’re about to sell your house to downsize, and you want a new condo, you may pay a premium buying at Margo instead of the existing resale condos in the area. You’ll have to wait a few years before you move in, but you might be okay with that since you’ll spend a bit more time in your existing house.
If you’re planning to downsize now and you need a place to move into right away, the resale condos south of Margo are a great choice, built by reputable builders, and there’s opportunities available to negotiate a desirable purchase price for you.
Are you thinking of investing in these condos?
Let’s take a look at the most recent rents of the existing condos to see if your rental investment will be positive.
9500 Markham Road
- One bedroom: $1600 to $1690 per month (leased in less than 10 days)
- Two bedroom: $1900 to $2200 per month (leased in less than 5 days)
9506 Markham Road
- One bedroom: $1650 to $1750 per month (leased in 9 to 35 days)
- Two bedroom: $1900 to $2150 per month (leased in 10 to 13 days)
9560 Markham Road
- One bedroom: $1600 per month (leased in 8 days)
- One plus den: $1750 to $1900 per month (leased in 11 to 23 days)
- Two bedroom: $1950 to $2300 per month (leased in 5 to 28 days)
9582 Markham Road
- One bedroom: $1700 to $1750 per month (leased in 5 to 19 days)
- Two bedroom: $2325 per month (leased in 6 days)
Let’s fantasize a little and pretend we’ve bought a condo at 9582 Markham Road. One of the most recent sales was a one bedroom condo that sold for $366,000 in seven days. (Mind you — that was after two previously failed sales attempts amounting to about three months of marketing.) Maintenance fees are $389.17 per month. Annual property tax amounts to $1,637.44. It comes with one parking and one locker space.
Let’s assume we bought for 20% down — $73,200.
We would need a mortgage for $292,800. Assume a mortgage rate of 3.5% (of course you could get lower, but let’s be conservative) and an amortization period of 25 years. Your total monthly mortgage payment would amount to $1,462. Utilities would be paid by the tenant, so don’t worry about that.
What would your total monthly carrying costs be?
- Mortgage: $1,462
- Property Tax: $136
- Maintenance: $389
- Insurance: $50
Your total costs amount to $2,037 *gasp*
A one bedroom would rent for $1700. You’d be pulling $337 out of your pocket each month to carry this condo.
However, how much is your principal repayment in the first year?
Looking at our amortization table using my handy mortgage calculator, you’d pay $7,487 in principal in your first year.
Being cash flow positive would be ideal, but even if you had to pitch in $4,044 ($337 x 12) of your own money into this condo, you’d still be ahead by $3,443.
Increase your down payment and the condo could carry itself.
Now here’s the fun part. How much did the original condo buyer of this unit acquire it for?
Want to stab a guess?
$230,581 — back in April 2017.
Even if you add closing costs, development charges, and all the fun stuff associated with buying a new condo, the original owner would have been cash flow positive if they had chosen to rent it out. Wow.
Mind you, selling it for $366,000 yielded a profit of about $135k.
Will we see similar results buying a new condo at Margo? Time will tell. Will Margo condos rent out for cash flow positive figures? It truly depends on your purchase price and your down payment.
Reach out to me if you’re interested in these new Margo condos, or if you want to try landlording with one of the existing condos in the area. Markham continues to grow. And there are a lot of opportunities to invest in real estate — or just to buy a place for you to call home.