The Pros and Cons of Buying a Preconstruction Condo

By Chad Bessey Blog No Comments on The Pros and Cons of Buying a Preconstruction Condo

There are plenty of benefits to buying a condo in Toronto, and finding the perfect one is an exciting time. However, there are a lot of factors to consider and big decisions to make. One major decision is whether to buy a condo which already physically exists, or whether to purchase pre-construction – a property which hasn't been built yet.

More and more Toronto buyers are opting for the latter, and there are a lot of reasons for this; however, it isn't a decision that you should take lightly. Here are some of the most important factors to consider when buying a condo preconstruction:

  • ​Plans and developments for the area
  • ​Market value
  • ​Growth and appreciation
  • ​Floor Plans
  • ​The reputation of the developer
  • ​Price per square foot
  • ​Features and finishes
  • ​Condo amenities
condo building

​​With that in mind, here are some of the main pros of buying a pre-construction condo:

  • ​You will generally get more value regarding price per square foot when purchasing preconstruction, compared to resale units. You will, therefore, get a better return on your investment in the future.
  • ​Maintenance fees are usually lower as new buildings require less maintenance compared to resale properties.
  • ​You will have more time to save up for the purchase, as you will make a series of smaller payments instead of the full amount up front.
  • You will be able to customize the finishes, paint, floors, and appliances to suit your preferences.
  • ​Your home will be filled with the most modern, upgraded amenities and finishes from the get-go.
pre-construction building

​​​​​However, you must also consider the cons of buying pre-construction condos:

  • ​You are investing a lot of money into something you have only seen a visual representation of.
  • ​You will have to pay HST as it is a new home. However, if you plan to live in the condo yourself, then you may be eligible for an HST rebate.
  • ​There’s a chance that the developer will not sell enough units to be able to complete the project on time, or even at all. There have also been instances where the completed property does not look the same as expected.
  • ​You will be required to freeze a significant amount of capital, which you won't be able to touch during the construction phase.
  • ​It is difficult to accurately determine market value, as there are no previous sales to look at. It is also more challenging to determine rental income if buying to let.
condominium development

​​​​​There are definite pros and cons to buying a condo preconstruction versus resale, and it is essential to make a decision that you won't regret. Take some time to consider your budget, preferences and how much risk you are willing to accept. It is advisable to consult with a realtor and a financial planner before purchasing to ensure that you are making the right decision. 

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