What to consider when buying pre-construction condo units
Every buyer asks, “How do I choose the right pre-construction condo?” Let’s face it: purchasing a condo based on a floor plan may be intimidating. What should you look for, and how do you know you’re making the proper choice?
We’ll review some of the principles we teach our clients and things you should keep in mind even if you’re only considering buying presale condos.
Even if you consider this an investment plan to sell on assignment, some factors must be considered. This article will run you through the factors to consider when purchasing a pre-construction condo.
What to Consider as an End-User
There are several variables to consider before you accept an offer on a pre-construction condo to reside in. After all, you’ll be living in this new condo for many years, so you want to ensure it’s as flawless as possible for your long-term enjoyment.
- The neighborhood: This is especially crucial if there are certain areas of the city that you despise. Many purchasers seek a sense of community. Therefore Liberty Village, Leslieville, or even King West are popular choices.
- The apartment’s floor plan: Do you require a separate workspace to work from home? If that’s the case, you’ll need to consider a true 1-bedroom with a den. However, a 2-bedroom might be better if you require space for guests or potential family members.
- Their deposit structure: When looking at the deposit terms, your finances should be in order, and you should know how much money you have available. 15% is relatively common, although we’ve also seen 10% and 20%. There are several possibilities to take advantage of favourable deposit structures inside existing developments, so don’t believe the launch offer is the only alternative.
What to Consider If You Are an Investor
Not everyone who buys a property plans to stay in it. In fact, investing in real estate as a property owner can be a lucrative business decision. If you plan to buy a pre-construction condo as an investment here are a few things you should think about:
1. The Building and Its Floor Plan
The emphasis in recent years has been on large structures, but things are changing, and so should your investment plan. Renters no longer want to live in buildings with more than 60 floors. Look for mid-rise buildings that cater to a broader range of renters.
Consider your floor plan and what is ideal for tenants. Historically, investors preferred smaller apartments, such as studio or one-bedroom condominiums. However, investors are expanding their search criteria to include larger apartments that may support two tenants/friends renting together. Investors are grabbing even three-bedroom units since the pool of renters grows as your offering grows. This also entails higher rental rates.
2. The Terms and Its Deposit Structure
To complement your investment portfolio, you’ll also need to evaluate the deposit structure and your cash flow. Planning for various deposit increments is one of the most important aspects of managing your pre-construction purchases.
One final point to consider is the conditions of your transaction. Is there a provision for assignment and sale? Will you be charged for selling an assignment? If you’re a clever investor, you know that there are numerous possibilities to sell on assignment, and you don’t want poor paperwork to get in your way.
There are many things to consider when purchasing a pre-construction condo unit, such as the location, the amenities, the price, and the builder. It is essential to do your research and ask questions to make an informed decision.
Are you looking for North Vancouver real estate agents to help you find the right condo? Roger Rampuri offers the highest professionalism and personalized strategy to match you with the best choices. Contact us today!