There is no doubt that pre-construction condos are becoming increasingly popular in the Toronto area. This is because they offer several great benefits for homeowners and real estate investors alike. In fact, pre-construction condos can net a return of 171% over 5 years in some cases.
However, there are also some drawbacks to consider before making a purchase. In this blog post, we will outline the pros and cons of pre-construction condos so that you can make an informed decision about whether or not they are right for you.
What are pre-construction condos?
Pre-construction condos are condominiums that are in the process of being built. When you purchase a pre-construction condo, you are essentially buying a unit that has not yet been built. This can be a great opportunity for investment, as you will be able to get in on the ground floor of the new development. Pre-construction condos can also be a good option for those who want to live in a brand new home.
Can you negotiate a pre-construction condo?
Yes, you can negotiate a pre-construction condo. In fact, it is often recommended that you do so in order to get the best possible price. One of the great things about pre-construction condos is that they are not yet completed, which means that the developer is often open to negotiating the price. This is something you should keep in mind when making an offer on a pre-construction condo.
Negotiating a pre-construction condo can be a great way to get the best possible price on your new home or investment property. However, it is important to remember that there are some risks involved with this type of purchase. We will outline these risks below so that you can make an informed decision.
What’s the process of buying pre-construction?
The process of buying pre-construction is relatively simple. The first step is to find a development that you are interested in. Once you have found a development, you will need to put down a deposit. The deposit is typically around 20% of the total purchase price. After the deposit has been paid, the developer will begin construction on the project.
It is important to note that pre-construction condos are often sold before they are completed. This means that you may not actually see your new home until it is finished being built. Do your research and make sure that you are comfortable with the developer before making a purchase.
Pros and cons of pre-construction condos
The following are the pros and cons of purchasing or investing in pre-construction condos.
Pros
One of the biggest advantages of pre-construction condos is that they are often sold at a lower price than completed units. This is because developers typically offer incentives to buyers willing to purchase before the construction is finished. These incentives can include things like free parking or upgrades to the unit. In some cases, you may even be able to negotiate a lower purchase price.
Another advantage of pre-construction condos is that you will have more time to save up for the down payment. With a completed unit, you would need to come up with the full down payment at the time of purchase. However, with a pre-construction condo, you may only need to put down a small deposit when you sign the contract. The remaining balance would not be due until construction is complete and you take possession of the unit.
Cons
There are also some drawbacks to consider before purchasing a pre-construction condo. One of the biggest risks is that the development could be delayed or cancelled entirely. This is not an uncommon occurrence, as many developers run into financial difficulty during the construction process. If this happens, you could lose your deposit and be left without a new home.
Another risk to consider is that the final product may not match up with your expectations. This can happen if the developer makes changes to the plans during construction or if they cut corners in order to save money. Either way, it is important to do your research and make sure that you are comfortable with the development before making a purchase.
Final thoughts on if pre-construction condos are worth it
As you can see, there are both advantages and disadvantages to purchasing a pre-construction condo. Weighing these factors will help you decide whether or not this type of purchase is right for you. If you need help with buying or selling real estate, schedule a free consultation with our team today.
