Pros of Buying a Pre-Construction Condo
February 22, 2017 | Posted by: Don Chen
So you are finally thinking about buying a home, and you start looking. The first challenge you will run into is, where am I gonna buy? With the soar in home price in 2016 and another projected price hike in the GTA, many home buyers, especially first time home buyers are left wondering if they can ever afford a home. This is not to mention the recent changes in the mortgage qualification process which presents more challenges to many home buyers. The old saying goes ‘There is light at the end of a dark tunnel.’, and there is! An interview with Aaron Maunutag, an experienced real estate agent with Century 21 Leading Edge, reveals some promising insights and benefits about purchasing a pre-construction condo.
Aaron talks about a few points on the appeal of a pre-construction condo. Though these points present different values to different individuals, all of them are definitely worth considering in the purchase of your next home.
•Low maintenance fees. New buildings require less maintenance which means less long term budgeting, and there is no need for major renovations for at least a decade! Not to mention that you don’t pay a lump sum even if there are major renovations, because the fees are absorbed into the monthly maintenance fees.
•Location. Most modern condo buildings or complexes are built near public transit access, shopping centres and entertainment districts, making the convenience factor very attractive. Easy accessibility to public transit also eliminates the need for a car, which saves you money.
•Living in style. Builders compete to attract buyers by providing the most trending amenities such as, modern gym, pet grooming station, basketball court, swimming pool, sauna, hot yoga studio, rooftop party room, squash courts, attached grocery stores and mixed vendors which otherwise you won’t have in a stand alone home.
•Customization. You get a say in the design plans and can customize certain elements (such as appliances, finishing, paint, backsplash and flooring). If you understand design trends and mass-market needs, you’ll be able to increase your condo’s desirability to potential tenants.
•Leverage. Having the advantage of the appreciation in value, while not having to put much money down all at once. Downpayment(DP) is paid in small amounts (5%) and spread in a period of 2-3 years, which gives you time to save up for future portions of the DP and closing cost.
•Assignments. As an investor you may be able to assign your contract before completing, and make investment profits without having to even take on a mortgage or put down more than your deposits
•Market Viability. There is a large number of people getting near their retirement age that are looking to down-size, and condos are a perfect option because they are smaller, easy to maintain and are located in some of the best areas in Toronto. This makes investing in these real estate ventures a smart investment move.
Buying a pre-construction condo is not without its drawbacks, but with the soar in home prices and steady hike in mortgage rates options are getting fewer and fewer. Ultimately, what type of home you purchase will depend on you life style, stage in life, and future financial strategies. The first or even the second home might not be your final home, so have a plan in place, and your dream home will eventually be within reach.