Alternative ways to find a home in Toronto
Co-ops are just one of several creative house-hunting options
In Toronto’s real estate market, any chance for a good deal is one to seriously consider. That’s what has some people turning to co-ops, a unique model of ownership that is popular in places like New York City but still sits on the fringes of Toronto’s real estate market.
“Everything I was looking at was a shoebox, which was getting a little depressing,” said Chelsea Alexander, an intern architect who bought a 930-square-foot, two-bedroom coop in Rosedale in December 2016.
Alexander finally found an apartment for a price she could afford and a size she was comfortable with but had to familiarize herself with the co-op model.
With a co-op, you do not own the space itself, like a condo, but instead own a share of the whole cooperative.
Your share gives you exclusive rights to live in the space, but you do not have a title in the deed.
This unique style of ownership comes with its own pros and cons, the number one con being it is harder to finance from the big banks because you don’t own a title in the deed, so the banks have nothing to repossess if you default on the loan.
Both BMO and RBC declined Alexander financing, which almost made her give up on her co-op endeavour.
“[It] definitely was rattling going into my bank, mentioning it was a co-op, and they’re like, ‘Oh, I’m sorry, we don’t actually do that,’ ” she recalled.
Alexander eventually found financing at credit union DUCA, which is a common source of financing for co-ops.
“Ultimately for the extra day of stress (to find alternative financing) it was worth it,” she said.
The other major hurdle for co-ops is the large down payment they often require, usually around 30 per cent of the total cost, compared to the usual five per cent with a condo.
Although this may turn off a lot of people, there is one demographic that fits quite well within the model — seniors.
“The only people I’ve had that are interested in co-ops are retired people who can buy in cash,” said real estate agent David Flemming.
“Downsizers cannot believe the condo prices.… When you get into a co-op, 2,000 square feet might cost you $1 million instead of $2 million,” he said.
That makes 26-year-old Alexander a unique demographic for co-ops. She admits that many of the people in her 40-unit building are seniors. But she sees this in a positive light due to the commitment shown
to the property (turnover is often low in co-ops) and the wealth of expertise the residents draw on to manage the property.
Co-ops are often a more handson style of property management, typically governed by an elected board of directors from the membership, as opposed to a property management company used by condos.
Residents have much more input in how the building is operated and how renovations are performed. “Everyone pulls from their career, which is fantastic,” Alexander said. And no, she doesn’t have any grassmowing duties.
“No! You don’t have to do anything,” she said. “We have separate contracts for everything.”
The more hands-on management, married with the fact that it is a smaller building — typical of co-ops, which are often renovated older buildings — makes for a closeknit community you might not find in condos, as Alexander notes.
“It just seems more family based.… It’s a really friendly community.”
The next frontier
Although co-ops are a longestablished alternative to the homebuying norm, there are other options available to those who dream of home ownership but are finding it hard to land that mythical twostorey, detached fish. Herewith, a few other options for those who are interested in going to great lengths.
Alternative living co-ownership
Many Torontonians are turning to co-ownership to cope with high real estate prices.
Co-ownership involves pooling resources together, often with family or friends, to split the cost of a mortgage.
When people pool resources together, properties that may have been above budget suddenly become accessible, creating more options to choose from. But the arrangement does have its pitfalls.
It is very important before buying to ensure there is clear communication between all parties that takes into consideration future circumstances, such as if one party wishes to sell.
It’s smart to treat co-ownership like a business partnership — you can even have a lawyer draft an agreement. Once the deal is done, then it is possible to split the living space to allow privacy, such as creating separate entrances, or living on different floors — a common arrangement.
Airbnb: the new couch surfing
For the commitment-phobic, living through Airbnb is a viable option to get a taste of Toronto’s different neighbourhoods and not be tied down by a lease or having to move furniture.
Great for those just arriving in the city, an Airbnb can be obtained quickly, with a wide variety of options in any neighbourhood you please.
When you tire of the local restaurants and scene, then moving is as easy as a click of a mouse. Although you save money not having utility bills, living in Airbnbs can run a premium cost as opposed to longer-term rentals, but that is the price of freedom!
Living in a boat
Nature lover? Then living on a boat may be the right option for you! There are a number of ports around Toronto, such as Marina Quay West in the harbourfront area or Bluffers Park Marina by Scarborough Bluffs, where you can dock your vessel and cosy up to the sound of lapping water.
The price of a boat depends on your comfort level with living in a smaller space. You can find a boat for as little as $2,500. Docking fees then can vary from $500 to $1000 a month, depending on the size of the boat and other marina fees.
Add in amenities such as hydro and electricity, and you’re looking at a rent of around $1,500 a month. But buyer beware: docking over the winter is not for the faint of heart — it requires much preparation and the acceptance that something will likely go wrong. But if adventure is the name of your game, then don’t let the naysayers stop you from enjoying the morning fog and a whiff of fresh air every day.
Chelsea Alexander purchased a Toronto co-op apartment in 2016
A co-op apartment at 21 Dale Ave. is currently listed for $995K