Pre-Construction Condo: 3 Things You Must Know Before Investing
In 2019, the cost of renting a condo in the GTA rose by more than 12% over the past year and is expected to do the same in the next decade. With the current supply, condo rentals are now seeing a higher demand from a long list of qualified applicant tenants and in most cases enters a bidding war among applicants themselves.
To ensure the pre-construction condo unit you’re looking to invest in gets the high level of interest, there are several things that first must be taken into account. Investing in pre-construction condos typically involves paying the builder in a series of small payments, instead of being asked to put down a large deposit right at the start. This offers investors more time and flexibility to make payments while acquiring the price per square footage lesser than those resale condos. Condos in Toronto ill naturally appreciate over time and as studies shows, it is expected to continuously appreciate property values in the next decade between 5% to 15% on average. The best opportunity to unlock the best appreciation potential is by taking advantage of early launch prices. The moment the condo development is finished, you are the owner of the newest condo in Toronto with trendy, modern and brand new property. Tenants will immediately be drawn to the modern amenities, appliances, and more that come with a new condo building. Additionally, you don’t have to worry about any issues potentially left over by previous tenants. Technically when you invest in an older resale condo, you are investing in an older unit. Older units tend to feature equipment and appliances that haven’t received some of the innovation and polish that new models have. New units come fully equipped with the latest pipes, electrical, paint, that requires less maintenance. Also, newer properties tend to invest in modern “green” technologies that usually result in lower utility bills as well.
Pre-construction condos provide the option for investors to add their own input in the design plans and control over certain elements. With the ability to choose the appliances, finishing, cabinets, and flooring ahead of time, you can make sure you are investing in a condo that best fits the needs of the tenants you are trying to attract. By staying on top of these trends, you have the opportunity to make your Toronto condo investment as attractive as possible.
Video: Market Watch March 2020
Now that I’ve shown you the basic benefits of investing in pre-construction condos, the next question you probably have in mind is how are you going to maximize the return of your investment? The key to getting the most interest from potential tenants is to understand and address the needs and wants. Fresh new condos, with modern amenities are always attractive to renters. But even the greatest new condo won’t fetch much interest in the rental market if it conflicts with the lifestyle of renters in the city.
Along with a gorgeous new unit, there is a short list of amenities that every Toronto renter values very highly. To make sure your unit gets the attention it deserves, choose a unit that is close to transit. This would mean that the closer your property to a bustling community such as a commercial complex, business districts and the likes, the more your property price is expected to appreciate over a shorter period of time. So it is definitely that condos are far less appealing if the renter sees that grocery trips, fine dining and shopping can’t be done near their condo building. Most Toronto renters living downtown don’t own or rely on a vehicle. The TTC subway and streetcar system is very reliable to get professionals to work downtown quickly. In the event a condo location isn’t close to a TTC or GO Transit Stop, having a condo with affordable parking and quick access to major highways is extremely important.
To sum it all up, in pre-construction condo investing, the old adage “the early bird gets the worm” always applies. The best way to ensure you get the most ROI is to buy properties when their prices are at their best. So if you are to ask when the price of a property is at their best to invest in? It is absolutely during pre-construction when you will always get the best price and benefits.
InfoGraphic Toronto Real Estate March 2020
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