Rental Yield and Price Appreciation – Discover your dream home in Richmond Hill, Ontario and make it a reality.
Yes, I’m in Regent Park again!
This time, I’m here to unbox my own unit.
I have a studio and a 1+Den unit in the One Park Place towers.
Today, we are going to unbox my brand new one bedroom unit in the Artworks tower down Dundas street towards the east end of Regent Park.
Here we are, at 130 River Street.
As you may already know, Daniels just launched their final pre-construction tower in Regent Park.
It is on the other end, the west end of Regent Park, at Parliament and Gerrard.
There is a special promotion on two bedroom units.
Some of you asked me to film some two bedroom units in this Artwork tower because the floor plans are similar to the new Daniels on Parliament tower.
So we will be touring a couple two bedroom units as well.
I have also invested in a two bedroom unit in Daniels on Parliament.
You see, I’m not just telling you Regent Park is good, this and that.
I’m actually sharing with you what I invested over the years and found really rewarding.
I recently sold one of my units that I think is not such a great investment over the long term.
If you want to hear that story, make sure you subscribe and hit the bell now.
In Regent Park, what you pay is basic downtown pricing, but as you can see, the quality you get is not basic at all.
And I love the fact that both rental and resale performances are really strong.
Let me show you my unit while I share some statistics.
It is a very small 447 square foot one bedroom unit with no balcony.
I bought it at just under $420,000 in October 2018.
My client has this same unit but on a low floor.
We rented it out in 10 days at $2,180 per month.
That’s really fast considering so many units are taking occupancy at the same time.
And that’s a very high 6.2% gross rental yield, higher than expected.
Back in 2018, the rent was only $1,800.
Even with the rent decreases during the pandemic years, we are still seeing a 21% rent increase within 5 years.
In terms of price appreciation, even after all that market crash, we are still seeing around 25 to 30% appreciation.
What if I invested in a small 1 bedroom unit in central downtown, steps to Eaton Centre, back in 2018?
How do the rental yield and appreciation look like today?
It’s interesting when you compare the numbers to Regent Park and I’ll share them after we tour the 2 bedroom units.
Let’s check out a 629 square foot two bedroom unit.
The current rent is $3,200 with parking.
The gross rental yield is 6.4%.
Again, this is quite a bit higher than expected because the rent was only $2,600 back in 2018.
So if you are trying to estimate the rental yield with your pre-construction purchase, make sure you use a projected future rent for your calculations.
This one is a corner two bedroom unit with 684 square feet.
This was a more expensive unit because it is 50 square feet bigger and it is a corner unit.
But the current rent is also $3,200 with parking, same with the smaller unit.
So the gross rental yield drops a little to 6%.
You see, when it comes to rental, tenants may not be willing to pay more for a better unit, especially when there are many units available during occupancy.
But you will get your money back when it comes to resale.
Now, let’s take a look at Regent Park versus central downtown for a smaller than 500 square foot one bedroom investment in 2018.
First of all, the price tag in central downtown was a lot higher and the deposit amount required was 20%.
In Regent Park, it was only 10%, so the amount of money you had to tie down was a lot smaller.
Five years later, today’s rent in central downtown for a small 1 bedroom is $2,400 per month, and in Regent Park, just under $2,200.
In terms of rental yield, it’s 6.2% in Regent Park and 5% in central downtown.
Roughly 31% price appreciation in Regent Park and 22% in central downtown.
You see, that’s why I think Regent Park is an excellent investment, being only 10 minutes away from central downtown.
And I’m definitely holding onto my units because Tridel will be building in Regent Park in the next 10 to 15 years.
But of course Regent Park is not for everyone because it is still undergoing revitalization.
Some people are still stuck with the impression that Regent Park is a bad, crappy area.
I won’t attempt to change that, but I would encourage you to come to this neighborhood and see things for yourself.
And central downtown always has its own charisma because a central location is irreplaceable.
If you do your investments purely based on numbers, without any emotions, you just want the biggest yield with the smallest input, then Regent Park should be an obvious choice.
Daniels on Parliament will be the last pre-construction opportunity by Daniels in Regent Park.
And it is the last chance to invest with only a 10% deposit.
Let me give you an incredible bonus.
For a very limited time, you can get parking and locker for only $9,500.
The normal price for this combo is $72,000.
Now it is only $9,500.
Only two bedroom units are eligible to buy parking.
I have picked out 2 of my favourite floor plans, if you want to find out more, you can schedule a call with me at the link below.