A Guide for Investing in Preconstruction Condos in Toronto
Investing in preconstruction condos in Toronto can be tricky. This is because you want to invest in condos that will give you the best returns on your investment. Fortunately, when you have guiding information this task becomes easier and you will never regret your decision. Today, there are many pre-constructed condos in this city. However, not every pre-constructed condo that you come across this city might be the right one for you to invest in. You need to start by deciding what exactly you want.
The first step in investing in a pre-constructed condo is identifying your objective when investing in a pre-constructed condo. What plans do you have for the condo once completed and registered? Do you intend to rent it or sell it? If you are a rate of return investor, you can purchase the pre-constructed condo to earn you rental income. If you are a wealth preservation investor, you can purchase a pre-constructed condo to be a safe place for you to keep your money and then earn great returns on your investment once you sell the condo out.
It is also important that you take time to learn about and understand the current economy of Toronto concerning condos. Currently, the price of newly constructed condos in Toronto is around $100/sf higher than that of resale units. On average, pre-construction condos are selling between $700 and 800/sf in Toronto downtown. You can get similar condos in Yorkville at $800 to 1000/sf. Carrying costs that include maintenance fees, taxes and mortgage will increase the amount once the condos are completed.
As such, if you are looking for pre-construction units that you will rent upon completion and you are determined to get returns on your investment you will surely generate income. However, you will have to incur some cost in covering the carrying cost of the condo.
If your intention is to sell out the completed condo after registration, make sure that you have considered the anticipation of market forecasters. Find out if the prices of preconstruction condos in Toronto will grow over time. Nevertheless, cost of preconstruction units has been appreciating at a similar level in Toronto and market forecasters anticipate the same between 2014 and 215.
Nevertheless, those who bought preconstruction units in 2008 and sold them in 2012 upon completion, they have enjoyed a generously good return on their investment due to price appreciation. However, this may not always be the case and that is why you need to be very careful when investing in preconstruction condo units in Toronto.