For the majority of buyers and renters, one of the most important details of a home is its location. Every community and neighbourhood has its own unique identity, characteristics and amenities – and these have a huge impact on the lifestyles of their residents.
You may already be familiar with some of Toronto’s most in-demand neighbourhoods such as Liberty Village, Queen West and Leslieville. Due to their popularity, properties in these areas come at a premium for buyers and renters alike. As a result, those who owned homes in these neighbourhoods before they became sought-after are enjoying some seriously impressive returns in today’s market.
This trend has boosted investor efforts to identify future in-demand neighbourhoods within the GTA.
Successfully investing in an up-and-coming area requires foresight and strategic market insights. Here are a few tips for purchasing an investment property in neighbourhoods that are gaining momentum.
Learn more about why Toronto’s real estate market is a great place to invest on my blog.
Defining ‘Up-and-Coming’
In short, ‘up-and-coming’ refers to an area that is slowly building notoriety within the city. Although an up-and-coming area may not be the most trendy just yet, it will show promising signs of popularity down the line. The term is sometimes used interchangeably with gentrification, however, there are more factors at play than increased development in the area.
Neighbourhoods can gain momentum with residents and investors for a number of reasons and even freshly developed subdivisions could classify as up-and-coming. That being said, affordability, nearby amenities and sometimes historical reputation usually play dominant roles in boosting a neighbourhood’s public profile.
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Can I Expect Less Passive Income?
As an investor, purchasing a property in a specific area before prices go up is great for your bottom line. However, if you plan on renting out your investment property, you may wonder how buying trends could impact what can charge for rent. First, it’s important to recognize that Toronto’s housing shortage impacts renters just as much as buyers.
In recent years, average monthly rental costs have risen across the GTA to reflect the growing demand for housing. As a result of the housing shortage, rental rates in less popular neighbourhoods can often be just as high as their trendy counterparts. This is simply because competitive renters are willing to pay higher rates in order to secure living space. In addition to this, as gentrification in an area increases, rental averages often do too. This is particularly true when an area sees an influx of new housing developments.
How to Spot Rising Neighbourhoods Early
As an investor, you face enough risks without having to worry about predicting the future. Thankfully, by working with a local expert, you can take the guesswork out of identifying up-and-coming neighbourhoods. If you’re looking to purchase an investment property, the best place to start is by working with an agent who specializes in investment properties. They can offer insights about rising neighbourhoods and help you buy at the right time.
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Neighbourhoods to Watch in Toronto
The Junction & Stockyards
While it’s no secret that The Junction has been steadily transforming over the past decade, many investors may not know that the area is set to have a second bloom in gentrification in the next few years. With many new condos and business developments on the way, The Junction is about to welcome even more residents. As a result, housing averages are anticipated to climb even higher. Purchasing property before this second wave could lead to great returns for investors.
Pape Village
Located just to the north of its popular neighbour Greektown, Pape Village has been slowly turning heads over the last few years. The area is mainly gaining notoriety for its wide array of restaurants and cafes as well as comparatively affordable housing. These factors, along with the neighbourhood’s proximity to the Bloor-Danforth subway line have also led to a growing number of students looking to rent in the area.
Clanton Park
Clanton Park is becoming a stand-out neighbourhood for residents and visitors alike. The neighbourhood’s growing popularity is mainly a result of the area’s diverse and plentiful cultural amenities. In fact, Clanton Park’s culinary scene is quickly becoming one of the city’s most celebrated. Plus, with new housing developments on the way, the area is set to become even more enticing for residents.
While these neighbourhoods are some of the most notable, this is by no means a complete list. Housing trends in Toronto are evolving every day, and the best way to stay up-to-date with the market is by working with a real estate professional.
As a local agent who specializes in real estate investments, I can help determine which investment properties are best suited for you. Get in touch.
