Micro Condos: Like Them Or Love Them, Because They’re Here To Stay

The topic of micro condos could be met with a shrug depending on where you call home; in cities like Paris and Tokyo, this tiny unit type is quite common, however, in many North American cities the idea of living in a unit that’s 400 square feet is not only unappealing — it’s lunacy.

Even still, micro condos are becoming more common in Toronto as they offer an affordable option for single professionals and first time home buyers. Many are still wondering whether or not this is a good thing for the condo market, but one thing’s fore sure, micro condos are here to stay.

For those who are on the fence about micro condos, we sought to highlight some of the issues surrounding micro condos, the benefits, and specific condos buildings in Toronto that offer this unit type.

Financing Concerns

By and large the most severe issue facing micro condos is the act of securing financing from a bank. Canada’s big 5 all have policies on the books that outline specific square footage requirements to secure a mortgage; micro condos are almost always below those requirements.

As a result, bank’s approve mortgages on a case by case basis — popularity, the number of units sold, and the location are all factors in determining whether or a not a micro unit will secure financing. Often times, these units will require a higher down payment than your average condo.

The reason behind such policies is that banks wish to insure themselves against a downturn in the market, and the worry is that a micro unit will rapidly lose value in such an event. Of course, these policies are becoming outdated and there’s so much demand for downtown Toronto condos that there’s hardly a risk of micro condos suddenly losing value.

Micro Isn’t For Everyone

It was only a few years ago that the tiny house craze swept over North America and had many home buyers weighing the pros and cons of tiny living; much of this enthusiasm rose up thanks to a popular HGTV show.

While the idea of owning a micro home on a scenic plot of land is appealing, the reality is that living in such a confined space isn’t for everyone, more so when it’s part of a complex.

There are sacrifices that need to be made when one goes tiny — entertaining is difficult, furniture must be modest, and an out and about lifestyle is absolutely essential to keep the walls from closing in. Some couples do own micro condos together, but it takes a very special relationship for two people to live in harmony together in just 400 square feet of living space.

Financial Benefits

Just as there are financial hurdles to jump through in order to purchase a micro unit, there are definitive financial gains that come with owning one, especially for rental purposes.

While unit size and floor plans are factors when it comes to units for sale, unit size tends have little to no impact on the cost of rent, which is usually determined by the number of bedrooms; if you follow that logic, micro condos make for great investments as their purchase price is lower than comparable unit with larger floor plans, but they rent for roughly the same amount.

For this reason, investors love micro condos.

Notable Condos With Micro Units

If you’ve weighed the idea of a micro condo and are open to owning one, for yourself or an investment property, you’ve got a lot of options in Toronto as these units are actually more prevalent than most people think.

Bay Street finance types can secure a micro unit in the heart of the action at Karma Condos; units here can be as small as 277 square feet. Yes, that’s not a type, 277 square feet. What might surprise people about units at Karma is that they actually do quite well on storage and functionality — they even have en-suite laundry. With the building location at 15 Grenville St, residents have everything they need just outside their front doors, making this a great choice for people who want to experience the city and use their unit as a place to rest, and not to entertain.

Smart House is another building that offers modestly sized micro units in the downtown core, this time in trendy Queen West. Suites in this building start at 350 square feet and feature a number of floor plans for units below 500 square feet. Again, the lure is price; these units have luxurious finishes and the building provides ample amenities; units here are generally expensive, so micro units in the building offer an affordable option for those who cannot afford the larger units. Though these suites are tiny, they do actually have walls separating the bedrooms from living spaces, thus offering a bit more privacy than a studio.

There are many more buildings to check out if you’re interested in micro units, with new units under construction all the time.

Is a Micro Right for You?

Unfortunately, the only way to know if you’re comfortable living in a micro unit is to try it yourself; a short term rental can give you a window into micro living, and if it feels cramped after a week or two, then you know it’s not a reasonable decision long term. But know that there’s always someone out there who won’t mind living in such a small space, and would likely be more than happy to rent one from you.