Investors looking to cash in on the hot Toronto rental market may need help to find the best pre-construction condo.
As of Dec 2022, Toronto rents were the second highest in Canada. One-bedroom apartment rent increased by 23%, while a two-bedroom apartment’s average monthly rent was $3347.
Ontario ranked amongst the 20 most expensive places to pay rent in Canada. Brampton rents were up by 28%, while those in Mississauga increased by 19.2%. In Kitchener, it was a 24% increase.
New buildings promising the best returns are popping up everywhere, and the selection process can be taxing. No investor wants to lose money or miss out on high-return deals.
To help you separate the wheat from the chaff, we have curated this listicle of the top 11 things to consider when picking a pre-construction condo. Keep reading to invest wisely.
1. Location, location
Location is everything, and you’re looking into the future. You’ll want to determine if the area is gentrifying and if the location appeals to many buyers.
Check the lifestyle, shopping options, major highways, and upcoming transit projects. There is also the entertainment and outdoors aspect, so look for parks, gardens, festivals, etc.
Remember schools and higher learning institutions. They should be a selling point.
2. Budget or an economical purchase
Buy when condo prices are low. If you’re on a budget, consider an economic sale like a pre-construction home in Kitchener-Waterloo. Also, compare house prices.
3. Builder’s reputation
When buying a pre-construction home, you buy rights, not a concrete building. Thus, the importance of the developer must be excellent to avoid cancellations.
Check past projects and how long they’ve been in business. Also, look into the quality of past buildings.
4. The possibility of a stable rental income
When buying a home to rent out, income projections are key.
Check if the area has tourist attractions, huge student populations, an influx of immigrants, and industries.
Short-term rentals are ideal in a tourist location. Additionally, the industries in the area should give you an idea of how many people will be looking to live near their workstations.
5. The floor plan
Picture what your prospective buyer would want and look for that. Look for open layouts with natural lighting-think biophilic designs. Think of walk-in closets, arches, and views (homes overlooking water views are popular). Others are ceiling heights and outdoor spaces.
6. Check on the amenities costs
Amenities look good on paper, but they carry additional charges that add to maintenance fees and monthly carrying costs. Over time, these costs devalue a house. So consider whether the charges are worth it and how they impact your Return On Investment.
7. Connectivity or transit
Upcoming transit routes and major highways will increase the value of your home with time. People want to live close to townhomes where they can easily transit to cities, economic hubs, entertainment, and retail shops.
8. The deposit structure and other terms
How the deposit payments flow is crucial. Check when the installments are due and see if you can meet the builder’s expectations.
Be prepared with about 10% of the purchase price to cover closing costs.
9. Capped levies
Expect the maintenance fee and other levies to rise, but check on the capping clause, so they stay manageable.
10. Assignment rights and permission to rent during the interim occupancy period
An assignment right allows you to sell your contractual obligations before closing. It’s good if you want to sell and make a quick profit. Engage an experienced real estate lawyer to check finer details on assignment rights. Also, confirm if there are assignment fees.
Check if the Agreement for Sale and Purchase allows you to rent your unit during occupancy. Most of them don’t.
11. Work with an experienced real estate agent
A good realtor will help you avoid bad deals and questionable builders. They’ll provide exclusive platinum first access to building plans. Working with an experienced realtor makes all the difference.
That means you can reserve the best units with premium features, such as an extensive balcony before they’re available to the public.
With our extensive experience helping over 500 per year, we know how to spot a great deal.
Click this link to talk to us now and discover the best deals!