Condo in Waterloo

condo buying

I got this link from Condo in Waterloo in the comments section of my real estate blog the other day. I wasn’t sure why it was there at first. Sometimes on my chat widget or in the comments section of my blog, people like to vent about their bad experiences in real estate. It feels good to get it all out. I get it. The acrimony isn’t aimed at me. Heck, I say bad things about the real estate industry all the time.


The real estate business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There’s also a negative side.


That is actually a Hunter S Thompson quote about the music industry, but I like it and suppose it can apply to many industries at different times.

But back to that bad luck condo blogger. I thought about it a little more and decided that the blogger had put the link in my comments because he wanted me to share it as a warning to others. “Don’t do what I did”, he is saying. “Don’t be a loser, like me”.

So let’s deconstruct it.

Here is the text. It is from a single entry blog called:


Condo in Waterloo

How to lose $40,000

Buy a unit for $329,000 with $30,000 in extra upgrades to give it an urban look.

Live in it for 2 years

Rent for 18 months

Sell it 9 months later for $317,00

Once real estate commission and all other expenses (i.e. lawyer, mortgage discharge), even considering the surplus income from 18-month rental period, near $40,000 lost.

Fantastic negative return on investment over 4 years.

Lots of lessons to learn from this misadventure.

Waterloo, Ontario – Canada


So what are the lessons?


Buying new from the builder

I have a theory. There is a real demand and an undersupply of places to live where people want to live – Waterloo Region – especially the urban cores. With few listings of homes in uptown, downtown, and midtown, property developers move in and put up high-rise condos (or in new subdivisions, new 1600 square-foot single family homes and/or high density stacked townhouses). So far, so good.

Here is the problem. In Toronto, I read recently, that the difference in price between condo units and single family homes is about $350,000. Here in Waterloo Region, the price is about the same. Makes me think either house prices are too low (yeah right) or the property developers are profit-taking and taking it’s clients to the cleaners.


Buying from the builder – part 2

Yesterday, with my client, I was in a price negation with a salesperson for a big development in Kitchener. Her attitude at the onset was “if you don’t buy it, someone else will”. It lead to a pressure-filled and nerve-racking 60 minutes of debate and information-finding and finally an agreement that the builder can approve or not (takes a week).

It was rough for me, and I do this for a living.

The price is set by the builder, not the market.

What I am saying above is that in the resale real estate market, the market sets the price. With new build, the builder sets the price.


Other lessons from our friend in Waterloo 


Plan to live in it for at least four years. 

Let’s say you buy a condo at the market price. Then the market price appreciates by 3% per year.  With selling fees (commission, lawyer…) it would still take about four years for you to break even. Here is a handy calculator. 


Understand your mortgage

There are lots of mortgages out there. What you gain in low rates, you lose in flexibility. If you think there is chance, even a remote one that you will have to break your mortgage, chose good flexibility over great rate.



We all want to be awesome. We want to show off to our friends and family how awesome we are. Upgrades are a reflection of the lifestyle we aspire to. Here is a good rule – choose the upgrades that will be hardest to add later. Pot lights, hardwood flooring, nice trim and baseboards…


Buying is easy

Selling is hard.



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  1. says: Sad Seller

    The owner owned it for exactly 4 years.
    The mortgage was variable and discharge fees (all in) added up to less than $1100)
    Sure, upgrades were expensive and a big mistake in hindsight.
    Agreed on the “buying from the builder” points.

    The reality is that resell condo prices in this region will continue to go down. A couple of acquaintances have gotten even worse deals than the one described just recently…

  2. says: Keith Marshall

    Thanks for your comments. I’m really sorry for your luck.
    I hope others can learn from your mistake

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