Condos are undoubtedly a crowd favorite when it comes to luxurious housing options. Let’s take the example of Toronto city. As per the records of Mortage and Housing Corporation, the ratio of the number of condos under construction to the rate of population growth is three times larger as compared to the 1990s. Apart from being a really good housing option, condos are also one of the best options for real estate investment; especially pre-construction condos – thy can earn you quite a fortune. But the whole process of owning a condo is not quite simple. There are a lot of places where you can go wrong and a lot of places where you can save up. If you’re planning on investing in a pre-construction condo project, you should be aware of every aspect related to the same. Here’s a quick guide on the top five things you should know about investing in Pre-Construction Condo projects:
- The setbacks associated with pre-construction projects.
Delays are pretty obvious when it comes to pre-construction properties. The closing date can be prolonged for weeks, months, or even years – it varies according to your builder. If you have a rigid timeline and can’t alter it even a bit, then opting for a pre-construction condo is not a good idea.
You also have to keep in mind the fact that you can only catch a glimpse of the final product once it’s done. Your builder can give you an idea of what the finished project might look like beforehand, but let’s face the truth – it won’t be a mirror image of the finished property. Slight variations are pretty obvious and you should expect the same.
- Getting a real estate agent is a good idea.
Getting a good real estate agent to work for you can help you with the whole buying process. They are the experts in the field and hence would have complete knowledge of the real estate market and all the properties for sale. They would also be familiar with all the developers in the field – both big and small. This makes them efficient to guide you through the reputation and history of each developer which will in turn help you make the final call. A good agent can be both your guide and protector in the whole buying process. You can rely on them to get you all sorts of details and updates related to the market, builders, and properties.
- Expect to pay the maintenance fees and bear the closing costs.
The maintenance fee is an unavoidable factor that comes with buying a pre-construction property. This amount is usually set quite low initially to attract potential buyers. But the situation changes after a while as you near the occupancy period. And once you occupy your property, the builder most probably will decide on a permanent maintenance fee that would be much higher compared to what you paid initially.
New properties come packed with extra closing costs as you approach occupancy like HST (Harmonized Sales Tax) costs, utility fees, etc.
- The cooling-off period and assignment.
The 10-day cooling-off period is a boon for buyers as this gives you a chance to re-evaluate your decision. In these 10 days, you can assess all the aspects of this purchase, get advice, and even back off from your prior decision.
You also have an option of an assignment where you can sell the property contract to someone else. The catch? Your builder should approve of the same.
- Site inspection
Once you’ve stuck to your decision of investing and the project is complete, you will find yourself as the owner of a brand new property. But you can’t ignore the possibility of you sparkling New Condo having imperfections. Hence it’s important to conduct a thorough inspection of the property. As for the inspection costs, the new owner has to bear it. So do a detailed inspection and never settle for anything less than perfect.