MASTERING THE ART OF BUYING PRE-CONSTRUCTION CONDOS
Monday Mar 18th, 2019
Thinking about investing in real estate? Real estate has always been one of the most successful investment options. I frequently meet young investors who are curious about getting into the real estate market.
Investing in real estate can be very rewarding – however, if you don’t do your research, it can go south very fast.
Investing in pre-construction condos has become very popular in the real estate market, especially in the Greater Toronto Area. So what are pre-construction condos? Exactly what they sound like – condo units which can be purchased before construction.
In Toronto, the condo market has been very hot these past few years. There are several projects and it can be a daunting task to determine what’s right for you. Before you dive into pre-construction condos, determine if they are the right investment option for you.
Ensure that your financial goals align with your investment goals. As a real estate investor, you may potentially become a landlord. You should familiarize yourself with that role and understand the responsibilities that come with it. Options do exist for those who are not interested in becoming a landlord or property manager.
Let’s explore what investment options are available in pre-construction investment and how it can be rewarding. One of the most important steps is to identify the project you wish to invest in. How? Remember, it all comes down to the Triple Constraints of real estate (read more about the Triple Constraints)
To make the process more manageable, you should gain an understanding of exactly what it is that you are looking for prior to beginning your investment. When considering options, I caution you to think like an investor and not as a live-in purchase
THINGS TO CONSIDER WHEN LOOKING AT LOCATION:
THINGS TO CONSIDER WHEN LOOKING AT PRICE:
THINGS TO CONSIDER WHEN LOOKING AT NEEDS/WANTS:
Nowadays, especially with fierce competition in all available condo projects – builders are providing excellent incentives to keep themselves competitive.
I recommend carefully picking a few projects that you are interested in and do an analysis by comparing the pros and cons! A good realtor can guide you through this and point out things that you may be overlooking.
Another key aspect of purchasing a pre-construction condo is timing! Buying at the beginning of a project is always best as you get the best prices, suite selections and incentives. If you are able to easily enter a condo sales office without a realtor and make a purchase – sorry my friend, but you’re very late in the game.
Real estate investments are fruitful when you hold on to them – for a long time! The days are long gone when you can easily ‘flip’ your condo and cash in. So always plan to be a long term investor or at least have a 5 – 10 year plan. This will give you the greatest return and likely the safest route with your investment.
Remember – be proactive when it comes to investing! If you are a newbie – that’s ok! There are resources available and it’s always better to work with a realtor that can guide you.
In my next article, I will go in detail about what steps are involved in the pre-construction purchase process.
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