4 Tips On Pre-Construction Condo Investments

4 Tips On Pre-Construction Condo Investments

Pre-construction condo investments are easy to understand and easy to manage, but be sure to understand all of the terms involved. Buying new condo developments in Toronto is a great way to start making money and a simple way to become a landlord. However, many new investors need clarification on the different investment calculations and formulas. Therefore, when making a condo purchase, here are some important considerations you need to consider.

Costs:

Pre-construction condos offer several benefits to buyers. They require very little up-front money and are often completed three to four years before the buyer purchases the unit. This means the investor can save for their down payment while the property is under construction. Because the developer builds the condos, the cost is minimal, giving the buyer time to save for their down payment. However, this is a long and stressful process, and the developer may need help completing the project.

Risks:

While pre-construction condo investments may be attractive, they are not without risk. By investing in a pre-construction condo, you are effectively buying a contract that will turn into real estate in the future. There are several risks to this type of investment, including the risk of losing money.

For starters, you must wait two to three years for the construction to be completed. Another risk is that the developer might need to perform as promised. The developer’s reputation should be considered. Large developers with a solid track record are more likely to live up to their commitments.

Terms:

Before you invest in a pre-construction condo, you should know what you’re getting into. This type of investment is like buying a futures contract in the stock market – you purchase the property for a certain price, believing it will appreciate in the future. The price of a property typically goes up in the long term, so you should be able to expect appreciation if you buy a pre-construction unit in a gentrifying neighborhood.

Conditions:

When buying pre-construction condo investments, thoroughly read the contract and conditions. These should spell out any clauses that need to be clarified and any extra costs that may be tacked onto your purchase. These extras may include admin fees and meter hookup charges. Having a lawyer look over the contract before you commit to it is a good idea.