Investing in pre-construction condos is currently the trendiest investment option in the real estate market in Canada. With a myriad of benefits, pre-construction condos seem to be the sensible purchase decision for both investment and residential purposes. Buying a property at its early development stage is certainly an exciting prospect since it gives you a choice over the location and development of the condo.
However, for first-time buyers, the pre-construction condo market could be a little intimidating and it is natural to get overwhelmed with the options available. To make sure you are making informed decisions about your investment options, make sure to follow the below-given tips curated by expert investors.
- The 10 Day “Cooling-Off” Period
Ontario Law has mandated the 10 days cooling-off period on all new condominium purchases in the province. According to this, when you buy a condo from a builder, you get a cooling period off period of 10 calendar days from the date of signing. In these 10 days, you can decide if you want the unit or not.
Generally, for most pre-construction condos, the prices are changed by bulders and as they open up for sales to the public, the incentives are also changed. This is why in this 10-day cooling-off period you can reserve the purchase price and the incentive.
- Invest in a builder before you invest in a building
Investing in pre-construction condos is certainly very risky especially for a first-time buyer. However, this risk can be easily avoided if you invest only in reputable builders. Select a reputable builder or a building developer with a solid track record of executing their development plans without any excessive delays and in a timely fashion. In order to ensure you are getting the vest resale condo value, it is important to check your developer’s post-closing history.
Reputed builders and condo manufacturers like Tridel offers exceptional quality with their building manufacturing as well as their customer services. As their latest development, Tridel Condos in Etobicoke offers a perfect opportunity to individuals and families to create an ideal lifestyle for themselves and to experience their idea of a perfect home.
- Closing Costs: Development Fees and Levies on Your Investment
The development fees and levies get decided during the development of your property. As the building goes up, the population of your building will naturally increase. It will also have an impact on the population density of your neighborhood.
As a result of this, the city will calculate the impact on your neighborhood and will charge your builder accordingly for enhancing the neighborhood by building improvements such as the construction of new streets, parks, schools, future transit solutions, etc.
If you hadn’t had your agreement reviewed by a good lawyer in the 10-days cooling-off period then your closing costs are most likely to be not capped. And as a result, your builder is likely to charge you the cost per unit that was charged to him by the city. This will impact your prices during the final closing. This is why it is necessary to have a good representation on your side so that you don’t end up paying extra.
- Fair Market Value
The market value of your pre-construction condo depends on your unit and the development. sometimes, the projects have their price at 10% above it while others have their price at 5% under market value. Similarly, a project can also be valued 10% under market value for one unit or a couple at 10% over its resale market value.
If you are smarter with your pre-construction condo investment and bought it with 20% down or less, then you can leverage the asset’s appreciation by 100% at a five to one ratio.
- Interim Occupancy vs Closing: The Difference
Interim Occupancy is when you are get handed the keys and can move into your property. However, you are not the technical owner of the condo yet. With condos, you get two closing dates. Let’s learn how.
Interim occupancy can be different for different residents in the building. During the occupancy, the building is not registered and the typical registration and the final closing will be happening within 6 months after the interim occupancy.
The final closing happens when your building is finally registered at the Confo Corporation with the City and your builder gets the 80% balance and you become the technical owner of your unit in the building. At this stage, your final adjustments will be calculated and paid such as land transfer tax, legal fees, and property taxes.
The Bottom Line
Investing in real estate is certainly very risky and as a first-time buyer, you need to make sure you are making the right decision by researching every aspect on your end and following the tips mentioned below. Tridel Condos in Etobicoke is among the most hot-selling properties in the city right now. With attractive amenities and peak comfort, they are bringing you a slice of heaven with competitive prices. You can also consult their expert realtors and investment professionals for better tips and gain a better understanding of their pre-construction condos.