Rebecca Condos appeals to investors

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New condo banks on Hamilton’s growth potential

Hamilton is benefiting from Toronto’s soft preconstruction condo market and with prices considerably lower than Toronto, the city represents a standout opportunity for both first-time home buyers and seasoned investors.

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For those reasons, Rosehaven Homes just launched Rebecca Condominiums in Hamilton’s Beasley neighbourhood  —  a 477-unit, 29-storey tower with a 12th floor podium  — with a unique inducement program created for investors searching for high-yield opportunities.

Rosehaven’s offering a two-year lease guarantee program, complete with property maintenance and management services, which it says will generate rents that are, on average, 155 per cent high than current market rates.

Marco Guglietti, president of Rosehaven Homes, says timing is everything. Beasley is one of Hamilton’s up-and-coming neighbourhoods, but not yet so gentrified that building economics preclude launching a high-rise — comprised of one-, one-plus-den-, and two-bedroom units — catering to young professionals. Units are between $528,990 and the high $600,000s.

Under the program, rents at Rebecca Condos for one-bedroom units are expected to command from $3,000 to $3,200, compared to the $1,900 market rate; one-bedroom-plus-dens will earn investors $3,200 to $3,500, as opposed to $2,100 to $2,200 on the market; and two-bedroom units will receive $4,000 to $4,100, higher than the market’s $2,700 rate.

The program was developed in tandem with In2ition Realty. According to Debbie Cosic, In2ition Realty’s CEO, the lease-guarantee program was developed with the idea of making Rebecca Condos “the most competitive high-rise development in the Greater Golden Horseshoe.”

“We, very carefully, with Rosehaven, examined what was needed in the marketplace that both investors and end users are looking for, and we’re able to guarantee lease rates 155 per cent higher than market rates because Hamilton gives you very healthy positive cash flow,” she said.

“It provides financial security while minimizing risk, especially because property maintenance and managing are included for free.”

While developers prefer 20 per cent purchase deposits, Cosic added, that difficult in today’s market, so Rosehaven’s offering purchasers an extended 10 per cent deposit structure — five per cent this year, five per cent next year, and the balance due in 2029.

Paul D’Abruzzo, CIO of Expert Investor Academy, is wary of Rebecca Condos’ program targeting investors because, since rental guarantees of this kind are well above market, they’re likely built into units’ sticker prices.

“What happens if you have to get a new tenant 2.5, three years later when the lease-back guarantee is finished? You’re going back down to market rents,” D’Abruzzo said. “How does your unit maintain its original value?” He added that investors should consider the maintenance fees and other carrying costs when purchasing any condo investment.

However, D’Abruzzo is bullish about Rebecca Condos ,if the investment horizon is long-term, which it typically is for savvy investors, if for no other reason, because of Beasley’ reputation. “And as the neighbourhood keeps developing, appreciation will grow stronger.”