Time to talk a little pre construction condo in Toronto, yeah?
Specifically, the good, the bad and the… well, I’m pretty stoked to report there isn’t so much ugly in Toronto’s crowded pre-construction condo market.
And no, I’m not just saying that to inch you closer to buying a unit at, say, 11811 Queen St West – an incredible new development on West Queen West, launching in February 2018 that I’m lucky to be on the VIP-VIP list for, thanks to PSR Brokerage! (Email me, karyn@homesweetkaryn.com for details and to save a spot.)
Okay, shameless plug aside — sorry, it goes with the salesperson territory! — Toronto is teeming with soon-to-be-built condos that boast big design cred, amazing extras and wonderful neighbourhoods.
So, why should you get in on the action? Or, conversely, why might you have doubts?
To answer those burning questions, let’s look at a few pros and cons about purchasing pre-construction — as well as what you need, need, need to consider before making the transaction.
The PROS Of A Pre Construction Condo In Toronto
– If you ask me, the number one benefit to buying a pre construction condo in Toronto is time — time to both save up money, and time to build equity. For example, when purchasing a pre construction condo in Toronto, you traditionally maintain a payment schedule, where you remit the builder a series of smaller instalments as deposits. These deposits usually add up to 20%-25% of the purchase price by the time of occupancy, which means you won’t need to concern yourself with paying the final 5% until you physically receive your keys. This allows you an extended juncture to get your financial house in order — pun intended — and your savings to where you want them to be. Phew!
– Another huge advantage is the prospective appreciation of your property. Truth be told, from the time your unit is built and you take possession of it, the value of the condo should increase. No, that’s not always the case. But in Toronto — where prices continue to soar — it seems to happen more often than not. Not bad, considering all you really bought in the first place was a drawing!
– Hello!?!? You get a brand, spankin’ new condo!! And as we all know, in a city like Toronto, new projects here tend to offer better amenities than their resale counterparts, as well as possess more upgrades. Plus, they are generally just trendier!
– You get a say in the design plans and are able to customize certain elements — such as appliances, finishings, paint, and flooring — in that same brand, spankin’ new condo. Which means if you think you have a keen eye for design trends, you’ll be able to amp up your condo’s appeal to potential tenants down the road.
– New buildings need less upkeep and require less long-term budgeting. So, hooray for low(er) maintenance fees! And probably no significant renovations for at least a decade, thank heavens.
– Pre-construction condos offer fantastic value in comparison to other investment options, and that’s especially reflected in their superior value per square footage.
The CONS Of A Pre Construction Condo In Toronto
– My biggest concern with a pre construction condo in Toronto is that it can be delayed multiple times. So you’ll require firm living arrangements until you are able to move into your unit. And if you’re renting, such a delay in occupancy could lead to a couple headaches.
– For the first couple months or year, at least, you better get ready to live in a construction zone. Especially if you live on a lower floor and receive early access to your unit, while there is still tons of work going on. Speaking from experience, gear up for the sound of drills, dust for days, crowded elevators full of construction dudes, unfinished hallways and amenities and the occasional sound of cement grinding. Ahhh, memories.
– Yes, although you’ll have access to models and virtual representations, in the end, you are still buying before you see the finished product. In that regard, it’s a bit speculative. And some people just can’t go for that!
– I guess some could say another con of purchasing a pre-construction condo is that you’re making a non-liquid investment. In other words, you’re freezing up a significant chunk of your capital for the two to four years time it takes to sell and construct the building. Moreover, pre-construction condos often expect larger down-payments than their resale equivalents, and you can’t pull out your cash should you require access to it.
What You NEED, NEED, NEED To Consider:
– The Floor Plan. Is it a practical use of its square footage? Where are the windows? I’m a big fan both as an end user and an investor of shallow units with lots of light, rather than deep units with windows just at one end.
– Condo amenities. Need I say more? Does this building have what’s important to you?
– How about the surrounding amenities, too? From healthcare and recreation options, to shopping destinations, places to be entertained, schools, parks and playgrounds — buying a new home is so much more than simply the home itself. It’s the desirable or useful features of the neighbourhood that matter as well!
– On that note, both Walk Score and transit friendliness are a must!
– And if you have a car, garage / parking options mustn’t be overlooked. If you don’t have a car, still consider buying a parking spot for resale in the future.
– Have your Realtor research city plans for the next decade and make sure nothing dramatic is on the horizon for your community, or an adjacent tower going up a year later than promises to block your view. It happens!
– Assessing current market value is crucial. It’s a bit tricky, since you can’t base value previous sales in the same building. But that’s why you have a great agent named Karyn (with a ‘y’) to do it for you.
– Have your Realtor check out comparables on the same street.
– Last but not least, never take the developer’s reputation for granted. Always look at the success — or shortcomings — of their past projects. Thankfully, Toronto mostly boasts some pretty great builders doing some pretty great things.
If you’re interested in learning more about pre construction, or resale for that matter, hit me up with your questions! Always happy to answer them!