By Ardi Honarmand
Immigrants to Canada and savvy investors are always looking for smart ways to increase their fortunes. Here are 7 reasons why pre-construction condos are worth considering as an investment.
- It’s an easier way to enter the property market. You pay the down payment (normally 20% of purchase price) in increments instead of all at once (example: 5% in 1 month, 5% in 6 months. 5% in 1 year, 5% in 2 years).
- With pre-construction condos, you make the return on the entire value of your purchase, despite only paying an initial portion (deposit payment) up front.
- You close the property (obtain a mortgage) once the building is complete, years after purchasing the unit, giving you enough time to grow your income and manage your finances so you are able to obtain a mortgage.
- You have the flexibility of selling your agreement (assignment of your agreement) before the closing date to recover your deposit payments and still make some profit. This is in case you are no longer interested in the unit, or if you are not financially able to close the property (obtain mortgage), or if you have to relocate for work or other reasons.
- Condos draw higher rental income compared to low rise. Once the pre-construction condo unit is built and ready to be leased, it will rent higher compared to comparable resale or rental units. Renters want modern finishes, latest features and amenities. Managing the tenants is also much easier.
- Cheaper to maintain. No need to spend time for repairs or maintenance (example: roof repair, furnace/ac/water tank repair, plumbing leaks, basement leaks, mold problem, driveway repair in low rise homes).
- In pre-construction, you have plenty of time to find tenants or buyers for your unit. Also, there is no rent control for condos built after 2018.