Ryan Coyle is a Toronto Real Estate Broker and Managing Director of CONNECT asset management. We found him hanging around The Condo Store in Liberty Village which is where he’s been keeping shop for the last few years. He’s a busy guy. He only had a few minutes between meetings, but all the same, I managed to pry lots of great information from his mind simply by asking him the questions we all want answered. There are few people as knowledgeable as Ryan Coyle in Toronto’s pre-construction condo marketplace; he has been investing in this city’s real estate for over twenty years and has developed a unique strategy to help himself and his clients accumulate large portfolios of cash-flow properties. Just ask him.

Hi Ryan Coyle. So, is now a good time to buy a condo in Toronto?

No. The best time to buy real estate was yesterday, and the next best time is today. Your question should be where is the best location? And the numbers have to make sense. Most people are too focused on the actual property, or they fall in love with a specific building or neighborhood. This is a factor yes, but when you’re buying real estate, you need to focus on numbers like cash flow, cap rates and future appreciation. You should always look at buying a condo as an investment versus a purchase. So, you should be asking is this particular unit a good investment or a speculative one.

What kind of appreciation is expected in the next 5 yrs in Toronto?

Future appreciation is very important, but people tend to fall into the trap of speculating and relying on appreciation for their condo or real estate portfolio. We like to say “Cash flow is king” when it comes to real estate investing. We do our best to look into the future, by researching the growth story of the neighborhoods we are investing in. We look at projected population growth, job growth through new office space and retail being added, and government spending on things like infrastructure and transit to name just a few factors. Once we’ve identified a strong growth-story, our experience tells us that the building and neighborhoods in which we’re investing will offer better-than-average appreciation and cash flow for our clients.

If a property is not producing positive cash flow from day one, is it still a good investment?

It could be depending on many other factors which cannot be explained in a single short answer, but a general rule of thumb is that you mainly look for properties producing positive cash flow from day one. This gives you more options. This is why it’s best to do your research, speak to experts that you trust and seek guidance from experienced real estate investors.

I’ve made a lot of money for myself and my clients investing in downtown Toronto real estate. We continue to invest in downtown Toronto and always will, but we are also identifying new “value neighborhoods’ outside of downtown Toronto where there is a strong future growth story. We are also identifying other markets in citiy’s that are primed for growth, such as student housing markets. There are definitely other opportunities out there, however I know that rent will always be in demand here in downtown & surrounding areas so the opportunity to find and keep tenants is high.

How much money should you save up before thinking about investing into your first condo property?

I always default to the numbers. Mortgage criteria has gotten much stricter over recent years and you’ll need to have at least 20% before considering investing in a condo. In 2019, prices are set to go as high as $1000/sq. ft. in downtown Toronto with the average price around $750K. That means the average person would need about $150K before being in a comfortable place to invest. Of course, there are other ways we teach people and options when looking at investing in real estate. This is another reason why we love investing in pre-construction. Often deposits are only 5%-15% down, spread out over a period of time. This gives you several years to save up for the 20% down payment that you will need when you close on the condo in 3-6 years.

What’s the best area in Toronto to buy real estate right now, and what should prospective investors look for when searching for rental properties?

It’s tough to narrow down the “best” area. It really depends on your lifestyle and what you’re looking for out of a neighborhood, condo building and investment strategy. Condos are definitely going to be more affordable, and you have to decide between presale, newer developments for resale as well as old, aged buildings. I always go back to the numbers and what your long-term investment goals are. There are so many great areas in the city to invest in if you know what you’re doing.

With a lot of talk out there about how millennials should rent versus buy, do you think it’s sound advice to rent where you live and buy what you can rent out?

Again, this really goes back to lifestyle and what your long-term objectives are. I feel like the younger generation don’t think about long term investments. Things in the market have been so good for so long in Toronto. If you’re thinking about growing an investment portfolio and not being tied down to a mortgage, but rather have other people pay it down while providing you cash flow, then definitely I’d rather see millennials buy investment properties than focus on buying a place to live in themselves. The time to start saving to invest is always now and, of course, younger generations have the advantage of time on their side and less responsibilities.

Where do you see the Toronto market going?

2019 is expected to be a record year for condos released into the marketplace. This could create more of a balance in the presale versus resale condo market. The number of people living and working in Toronto grows every day, and these new residents require housing. For investors, that means a larger pool of potential tenants in a market where demand is already high. It will be a very interesting year in real estate here in Toronto and as I tell all my clients, it’s important to educate yourself and find the right real estate professional to help you navigate the market and find the best investment for you.