Top 5 Most Common Objections for Investing/Buying in Regent Park

Andrew la Fleur: In this episode we tackle the top five most common objections to investing or buying in Regent Park. Stay tuned.

Speaker 2: Welcome to The True Condos Podcast, with Andrew la Fleur. The place to get the truth on the Toronto condo market, and condo investing in Toronto.

Andrew la Fleur: While Regent Park has been a dramatic success, and the neighborhood has come a long way over the past 10 years since the revitalization has started, there’s still a lot of people who have questions about the area, questions about investing in the area, and they’re still skeptical if this is really a good thing. With that in mind, I wanted to talk to you today about the top five most common objections to buying or investing in Regent Park. Now I have course am on record many times as saying, and it’s true that I personally have invested in Regent Park several times. I’ve actually bought three condos in Regent Park over the years from Daniels, and part of the revitalization going back to 2010. Obviously you know my stance on the community, and my investments have done very, very well. That’s the best testament I guess you could say, to any objection that’s out there.

But, specifically let’s look at these five objections that I hear from people all the time, who are first time investors, first time looking at this neighborhood, first time thinking about buying into this area. The number one objection is, “Regent Park is a bad area. Regent Park is a bad area.” That could mean different things to different people, but that’s a common statement that I hear people say, and they ask me, “Andrew, is Regent Park a bad area?” Or, “Isn’t that a bad area?” The idea of being, you don’t want to, you shouldn’t invest in a bad area is sort of the question behind the question.

Now, as a side note of course you could make an argument that investing in bad areas, if there is such a thing, is actually better than investing in good areas because there’s more upside in a bad area than a good side, generally speaking. Especially in a city like Toronto, which is changing rapidly, and the areas that are sort of underdeveloped are fewer and fewer, farther and farther between to find these days. But with that being said, is Regent Park a quote/unquote, “Bad area?”

Well, there certainly has been a stigma attached to Regent Park, and with good reason. I mean Regent Park has been a very troubled area over many decades. But that stigma does not necessarily have any reflection on what Regent Park is today. What happened in the 1960’s, 70’s, 80’s, even in the 90’s, before the revitalization sort of started. That really has no bearing on what the neighborhood is today, but unfortunately that stigma has been a tough one for the neighborhood to shake, the reputation so to speak. Even though what’s happening in reality is very different, as is often the case, from the reputation.

What I always like to say is that a reputation, or a stigma like that, that has been attached to a neighborhood for decades, it’s going to take a generation really, for that stigma to completely go away. Believe it or not, we’re already about halfway through a generation. The revitalization has been going on for more than 10 years now, since this whole process started. More than 10 years. I believe it was around 2005, 2006 when this all started.

It’s already halfway through a generation, a generation being about 20 years or so, that this has taken place. By the time that Regent Park is completely built out and revitalized, and completely torn down, and completely rebuilt, it will be a full generation. It will really be about 20, to 25 years from sort of the first meetings that were held talking about, “We’re going to do this thing, revitalize this neighborhood,” to the final brick is in the final condo, or the final piece of glass is installed in the final condo in this neighborhood. It will be about 25 years. We’re about halfway through that now.

What’s interesting is that the people, the residents, the tenants, the buyers coming in now, the younger generation, sort of the 25 year olds who are coming in now to the neighborhood, many of them have no idea about the past and the history of Regent Park. Like I said, you’re already starting to see this stigma and the reputation change, as the younger generation is coming through. It’s mostly the people like me, and maybe you listening, if you’re of the older than 25 year old crowd, that, that stigma and that reputation is sort of stuck in your head. But you don’t realize that it’s been a decade of change already. It’s been half a generation, and the neighborhood is completely different from what it ever was before.

You notice at most when you talk to 25, you know, 25 year olds say, who’s coming in to rent the unit, or buy their first place. Maybe they’re getting help from mom and dad, whatever it may be. They just see Regent Park as that area east of Parliament in the Downtown East, that’s changing quickly, that has some really cool new buildings, that has some cool parks, athletic grounds, community center, aquatic center, restaurants, shops are coming in. They’re just seeing that as an interesting area that’s in transition, and a lot of them don’t even realize that there is a stigma, there has been this stigma attached to it in the past.

That would be my answer to, “Is Regent Park a bad area?” The answer is, yes, certainly in the past it has been. But now, it is completely different. Again, you really need to come and see it for yourself to fully appreciate it.

Number objection, “Regent Park is not safe. Regent Park is not safe.” Another way that people say, “It’s not an area where you can walk the streets, or you can’t walk around at night. It’s not safe.” This kind of notion that somehow it is an area where if you’re walking around, you’re going to be assaulted, or murdered or something like that. That is a perception that’s out there. Again, it’s tied to the first objection, related to the reputation that Regent Park has had in the past. Warranted or not, that’s what people are thinking. Again, my number one advice to anybody who’s thinking that is go there yourself. So many people I talk to make blanket statements about the neighborhood. They say, “Regent Park is this,” or, “Regent Park is that.” I say, “Well have you been there?” “Well no, I just, I heard.”

Oh come on, I mean you believe everything you hear? Go there and look at it for yourself, and make a decision for yourself. Do your own research, talk to people who live there, talk to investors who have bought there, talk to tenants who rent there, and find out what the actual people in the area think. When you do that, and you go there yourself, the universal reaction I get from everybody is, “Wow, I didn’t realize it was like this. I didn’t realize it was so nice. I didn’t realize it had changed so much. I didn’t realize how … You got like a brand new neighborhood in the heart of Downtown Toronto. It’s actually very cool.”

Just talking to all my tenants, many of my tenants have been single women. Probably the majority of my tenants in my three units in Regent Park, the one common demographic has been single women in their sort of late 20’s, early 30’s. Even one of my tenants at one point was my sister, and I’ve interviewed her on my podcast as well. She lived in one of my units there for more than a year, and she absolutely loved it. She loved the neighborhood, she loved the feel, she loved the vibe, and she met a lot of great people there.

Finally, the thing that I like to tell people, it’s something that you won’t see in any press release, you won’t see on any website, but here’s an interesting anecdote from one my of my clients who’s actually a police officer, works for the Toronto Police, and actually works in the part of the city where Regent Park is. He’s also a condo investor, and he’s bought in the area himself too, for investment. He basically told me something very interesting. It was actually a couple years ago now, so it’s even more relevant today. He basically said, “Since the revitalization took hold a few years into it,” he said, “The police activity, and the amount of work, and calls that the police have in Regent Park,” he said, “Dropped off dramatically. Basically there’s not really much for them to do there on a day to day basis anymore.”

Versus,” again, “What it was like in the past, what it was like in the 70’s, 80’s, and 90’s, where they were very active in getting calls all day long and all night long to the neighborhood.” He said, “Now, it’s almost like there’s nothing for them to do. They’re moving their resources elsewhere, outside of Regent Park, because it’s just so … “There’s nothing for them to do there for the most part, compared to what it was before. Again, this is not something that you’re going to see published anywhere, because obviously the police don’t want anyone who would do something bad to think, “Well there’s an area where I can go, because the police tell me, the police aren’t expecting a thing there.”

Obviously they’re not going to go around publishing information like this, but anecdotally verbally just speaking to me in person, this is what my client told me. Take it for what it’s worth, but I think the neighborhood, again, is worth a visit if you haven’t been there yourself, to really see what’s happening with your own eyes.

The third most common objection to investing in Regent Park is something like this, “Subsidized rentals will ruin my investment. Subsidized rentals will ruin my investment.” This is related to the fact that the neighborhood has a portion of subsidized housing in it. If you didn’t know, traditionally the neighborhood of Regent Park has been 100% subsidized rental housing. All those units are being torn down, and replaced one for one. All the subsidized housing units that are disappearing have to be rebuilt in the new buildings. There are subsidized housing buildings in Regent Park.

Now, number one is you may not even know that, because if you go there and you look around, you see beautiful new buildings with amazing architecture all around you. You have no idea which ones are condos, and which ones are rentals. That’s because the quality, and the architecture and everything was built all to the same high standard as if it was a condo, or as if it was a rental building, you don’t know the difference. That’s one of the keys to success of the neighborhood is the integration.

The other thing is, when Regent Park is all said and done, the neighborhood will have approximately three condo units, for every one rental unit. The vast majority of units, properties in the neighborhood will be market condominium units, and there will be a smaller proportion of rental units, subsidized rental units of different varieties in the neighborhood with it.

What I always tell people is in Toronto, there’s subsidized housing everywhere. Some buildings have subsidized housing, some brand new condo buildings have subsidized housing within the building itself. That is not the case in Regent Park. Every building is completely separate, whether it’s rental or condo. But if you go in just any neighborhood in Toronto, whether you realize it or not, there is subsidized housing all around you. Many people think, “Well if I invest in this posh area, then it’s not near any subsidized rentals, and I’m just going to be amazing ’cause look at the prices here.”

Well I got news for you, that a building over there in the corner, you don’t even know it, you don’t realize it, that’s a subsidized rental. I mean, my point is there are … If you look around, you start to actually look at what the buildings are in Toronto, there’s subsidized housing everywhere. It’s a function of living in Toronto, it’s part of the fabric of the city, and it’s part of the philosophy of Toronto community housing, and formally Ontario housing is to have it mixed in with the regular sort of market housing.

That’s number one, even if you’re living in Shangri-La, Ritz Carlton, whatever. Just take a five minute walk or less, you’re going to bump into a subsidized housing building, whether you realize it or not.

Really the number one answer to this question, the most important thing here is the numbers don’t lie. Just look at the track record that’s already been there. Again, Regent Park, we’re 10 years into this thing. The notion that somehow the fact that there’s subsidized rentals in the area makes it a bad investment, or means that you’re not going to see a good return on your investment if you buy here, it’s completely bogus because you could just look at the numbers, and you look at people who have invested, myself included, and everyone has done very well, and values have appreciated very well. Just as good, or better, than anywhere else in Toronto, or anywhere in the greater Toronto area.

That’s the third one. Number four is, “Regent Park is not Downtown enough, or it’s not Downtown,” some people think. Again, this, I think is tied perhaps to the old mentality that somehow Regent Park was this separate subset of the city, it was this community with a wall around it, even though it didn’t actually have a physical wall. It was sort of walled off from the rest of the city, and people just thought, “You don’t go in that area, that area is not Downtown. Over here’s Downtown, but over there is Regent Park, and it’s something else.”

It’s just simply not true Regent Park is completely Downtown. You’re right in the Downtown core. You’re minutes away from everything. Eight minutes on the streetcar, you just hop on the Dundas Streetcar, you’re at Yonge and Dundas, which is by all definitions, that is the center of Toronto, Yonge and Dundas, Dundas Square, Eaton Center, Ryerson’s right there, UFT is close by, the Hospital District is right there, Financial District is two seconds away from there. In eight minutes on the streetcar, you’re at Yonge and Dundas. You could bike there in 10 minutes, you could walk in there in probably 15, 18 minutes. You can walk to the Financial District of course, where many people work. You can walk to both universities, all of the hospitals and everything.

This idea that it’s not Downtown enough. Again, go there yourself, hop on your bike, hop in your car, hop on the streetcar, test it out yourself if you don’t believe me. Look at it on a map, look at Google Maps, do the math. You are definitely Downtown. The Downtown East as a whole, everything East of yonge, all the way to the DVP is undergoing massive redevelopment, revitalization and transition. It’s an area with tremendous upside to invest in.

The other great thing about Regent Park just geographically speaking is, it’s just so well connected. You’ve got great streetcar access, if you’re a driver you can be on the DVP in 30 seconds, ’cause there’s a DVP on ramp right at Dundas. You’re well integrated with the street grid, there’s no physical barriers like other master plan neighborhoods in the city, where you’ve got rail lines, and highways, and things cutting you off. No, you’re very well integrated into the grid pattern of Downtown Toronto that everybody loves so much.

That is number four. Number five objection to investing or buying in Regent Park, most common, “No one will want to rent from me if I buy …” This is for investors. “No one’s going to want to rent in Regent Park. Who’s going to want to live there?” Or, “If I buy …” Some people say this to me, “If I buy a condo here Andrew, for investment, am I going to be renting it to crack head tenants?” Believe it or not, I actually have people ask me that exact question, more than once.

Again, the proof is in the pudding, look at the numbers, look at the stats. The numbers don’t lie. Rental rates are amazing, amazing in Regent Park. They’re growing every single year. In the past year especially, they’ve grown tremendously, more than 10% on average. Prices have gone up significantly too of course. “Who’s renting in Regent Park?” That’s another common question is, “Who are my tenants in all these units that I have? Are they these horrible, low quality tenants somehow because it’s Regent Park?” No, completely untrue.

It’s the same as anywhere else Downtown. You’ve got your usual young professional crowd, people 25 to 40 working professionals. You’ve got some students, so people going to one of the colleges, or the universities. Maybe they’re working part-time, maybe they’re not. You’ve got … The interesting part is you’ve also got families, you’ve got retirees, you’ve got down sizers coming in now. The fabric of the neighborhood is really changing as well. A lot of people who don’t fit that traditional young professional mold, which is the majority of downtown condos, they’re really flocking to this area.

Families, retirees, just people with kids, older couples, older professionals maybe who their kids have moved out, but they’re still working, maybe they work Downtown, they’re going to be working still for another five or 10 years before retirement. You got a lot of those people now being attracted to the area for the way that it feels, the way that it’s connected, the value and the pricing, and just the great quality of the units, obviously, that you can buy there.

Looking at the stats, check out these stats for rentals. I just pulled out the stats for Regent Park, all the buildings, rental units over the last few months, three months. All the units that have rented out there, the median days on market, so the number of days it takes for a listing to be rented out. The median days on market for rentals is four, okay? It’s four. Four days. Anything comes up, it’s being rented in four days. It’s unbelievable. For sales wise, resales of condos in Regent Park, the median days on the market is 11, 11. Not even two weeks, and the average property is sold.

Again, the numbers don’t lie. You can listen to me, or believe me, or don’t believe me. But just look at the numbers yourself, and there’s your answer right there. Okay, there you have it, that’s my little podcast on the top five most common objections to buying or investing in Regent Park. I hope you found this podcast useful. If you did, go ahead and share this with somebody that you know could benefit from it. Until next time, happy investing.

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