Buying Pre-construction as an End User
There are several aspects to consider while choosing a pre-construction condo to reside in. After all, you’ll be calling this condo home for a long time, so make it as wonderful as possible for your long-term enjoyment.
The first stage in your research should be determining the neighbourhood you would like to live in. Most major Toronto neighbourhoods will have new projects to select from, thanks to the influx of new developments.
This is especially crucial if you have specific neighbourhoods in the city that you despise. Many end users need a sense of community, therefore areas such as Liberty Village, Leslieville, or even King West appeal to a diverse group of consumers.
It’s time to think about your floor plan once you’ve decided on a project in your preferred neighbourhood. Do you require a separate work space to work from home? If that’s the case, you’ll need to consider a true 1-bedroom With den. A 2-bedroom might be considered if you need more space for guests or prospective family members. However, you’ll need to consider the 2-bedroom plan — do you want a split layout or are you fine with the bedrooms sharing a wall?
Do you require two complete bathrooms? Or a guest room with an ensuite and a power outlet? There’s also the issue of the outside — balcony or larger terrace? If you enjoy grilling, you’ll want to see if your balcony has a gas connection. These are rare, but for those who enjoy cooking, they could make or break your condo decision.
This is a major consideration when buying pre-construction housing and should be thoroughly considered. If you operate with a VIP Broker, you should be able to take advantage of special offers, which may include a deposit structure benefit.
When looking at the deposit terms, your finances should be in order, and you should have an estimate of how much you can spend. 15 percent is very average, but we’ve seen some as low as 10% and as high as 20%. Don’t think that the launch offering is your only option. There are lots of options to take advantage of favourable deposit structures within developments that are already selling.
Buying Pre-construction as an Investor
If you’re thinking about buying a pre-construction condo as an investment to own and rent, there are a few things you should think about.
The first is, once more, the neighbourhood. However, this selection is based on where there is a large demand for rentals, not where you like to spend your time. Your VIP Broker should be able to provide you a summary of where there is significant demand in the city, as well as areas to avoid if there are too many rental suites available.
Building & Floor Plan
The focus has been on huge structures in recent years, but times are changing, and so should your investing plan. Renters no longer want to live in skyscrapers with more than 60 stories. Look for buildings that appeal to a broader range of renters, such as mid-rises.
Consider your floor plan and what would be most appealing to tenants. Investors have always preferred smaller apartments, such as studio or one-bedroom condos. However, investors are now broadening their search to include larger rooms that can accommodate two tenants or friends renting together. Even three-bedroom units are being rented by investors, since the pool of renters grows as your offering grows. This also translates to higher rental numbers.
Deposit Structure & Terms
In terms of your investment portfolio, you’ll also need to evaluate the deposit structure and your cash flow as an investor. One of the most important aspects of managing your pre-construction purchases is planning for the various deposit increments.
Another thing to keep in mind is to think carefully about the terms of your purchase. Is there a clause in the contract that allows for the sale of an assignment? Is there a charge for selling an assignment? If you’re an astute investor, you’ll recognise that there are numerous opportunities to sell on assignment, and you don’t want shoddy paperwork to get in the way.
Learning how to choose the correct pre-construction condo is an important first step in achieving success in the Toronto market. Although there are various factors to consider depending on the aim of your purchase, being informed and dealing with a VIP Broker who understands the numbers and the market are essential.
Contact our experts for personalized advise and real estate investment planning. Call 416-878-0749 or Register here.