Should You Buy a Pre-Construction Toronto Condo?

Should You Buy A Pre-Construction Condo?

In Toronto’s sought-after real estate market many buyers choose to get in on new developments early. There are a variety of reasons people choose to buy pre-construction, but is it the right choice for you? 

These are some things to consider when deciding whether you should buy a pre-construction condo:

TIME:

Ask yourself: how long are you willing to wait before moving into your new condo? If you are living somewhere you want out of fast, pre-construction might not be for you. Younger buyers who are willing to live with parents and save while they wait often choose pre-construction. A pre-construction development often takes much (much) longer than originally planned but the developer. You should be prepared to wait a while, even years.

INVESTMENT: 

Many view pre-construction condos as a great a way to get into a hot area for a more affordable price per square foot than comparable resale units. Therefore, pre-construction condos are popular with investors and buyers who see the potential of their unit’s longterm value. Some investors buy with the intention of turning the unit into an income property. Make sure you research the neighbourhood and look into master plans for the area so you have a better idea of future value.

BUILDER REPUTATION: 

When you’re buying a pre-construction condo you’re putting a lot of trust into the builder. So make sure you do your research! Look into which builders have an established reputation in Toronto. Also, read about other buyers’ experiences buying pre-construction condos from any builders you’re considering. After you choose a development, study building specific documents so you know what you’re agreeing to. Also, get professional advice from a real estate lawyer or trusted realtor and have them help look over the agreement. 

CUSTOMIZATION: 

If you buy pre-construction you have more choices about the unit you buy. You can choose which floor you're on, choose from different layouts, select which side of the building your view will be from, and so on. You can even have choices in customization of your unit. Many buyers love having their say from the beginning rather than buying whatever resale units are available. 

CHANGES: 

With that being said, be prepared for there to be changes made throughout the development. Did you fall in love with that incredible list of proposed amenities? Keep in mind that these plans are just that; proposed, not guaranteed. Ideally you’re buying into the building for other reasons (such as location and builder reputation) and are able to be flexible in your expectations. 

COST:

While the overall cost might be lower, pre-constructions condos often require a larger down-payment than resale condos. You’ll need to pay the builder a specific amount up front when you sign the buyers agreement, and at each phase of construction. Make sure you read your agreement and have money set aside for each deposit and at closing. The good thing about the development taking a longer time is that you’ll have time to keep saving during the construction process. 

While many buyers feel more of a sense of security buying after construction has already begun, financially it’s a good idea to get in earlier. The earlier you buy into the development the more you’ll save.

RISK?:

Some buyers are leaning toward pre-construction but are fearful of the risk involved. We have all heard unnerving stories about certain developments falling through. So, how high is the risk of a development getting cancelled? Honestly, not very. There are very few projects that get cancelled (usually just a handful out of hundreds). You tend to hear about the ones that don’t work rather than the ones that do. The two best ways to avoid a problematic experience are to: 

1. Get professional help throughout the process.
2. RESEARCH: The Builder, The Cost, The Neighbourhood.
   

Hopefully you now have a better idea of whether pre-construction is the right move for you! We can also help you find out more about builders, and decide if a pre-construction Toronto condo is right for you.