Buying a preconstruction condo unit, whether it’s to live in yourself or to rent out as an income property, is a great investment no matter when you buy in. However, making the move now, while the market is hot and your unit will have plenty of time to appreciate, will only help you make the most of your overall investment.
Top tips when buying a preconstruction condo
When buying a preconstruction condo, it can be difficult to choose the perfect unit for your needs since you’re basically buying into drawings and digital plans. Taking these factors into consideration can help ensure that you end up with the right space.
1. Price of your investment
A significant benefit of buying a preconstruction condo is the opportunity to buy early and lock in some significant pricing promotions. Importantly, check out current listings of condos in the same market, and apply market price trends to determine what kind of return you can hope for (even on day 1 of taking possession which may be 2-3 years out!).
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2. Desirability for renters
If you’re buying a preconstruction condo with the intent of using it to create a rental income the top consideration when choosing a unit should be how desirable renters will find it. Things like how the unit is laid out, how close it is to an elevator or stair way and whether there is space for in suite amenities like laundry and a dishwasher will ultimately help you appeal to renters.
3. What floor the unit is on
Generally speaking, when buying a condo unit, the higher the floor, the higher the price. While you want to maximize your ROI by paying a low price for your unit, often you can actually charge a higher rent for units that are at the top of the building compared to those at the bottom. Higher units usually offer tenants better views, increased security and a quieter atmosphere, so prices can be raised accordingly.
4. Presence of an outdoor space
Ensuring that the preconstruction condo that you are considering has an outdoor space like a balcony, terrace or even a rooftop or ground floor shared space will entice renters who value spending time outdoors.
5. What kind of amenities are included?
Great amenities like parking spaces, a storage unit, a pool space, a BBQ area or fire pits, in suite laundry and on-site work areas can help entice renters and future buyers into your condo unit. When you can offer amenities that they might not find elsewhere you have a leg up when it comes to reselling or renting out your unit.
6. Condo fees and HOA requirements
Most condo units will come with a required fee to pay each year, but the key is to compare whether the fee is acceptable considering what you get for it. Things like lawn and pool maintenance, snow removal, window cleaning and general grounds and building maintenance are usually included in this fee.
7. Location of the building
The location of the building in relation to schools, shopping centers, playgrounds, transit routes and green spaces can play a big role in how easily you’ll rent out or resell your preconstruction unit when the time comes.
8. The site plan of the unit and the building
Above all, the space you are buying should make sense and feel liveable. If the floorplan of the condo unit or the grounds as a whole feel confusing or uncomfortable, you are less likely to feel confident in your investment.
Preconstruction condos are a great investment opportunity
With the help of many early buy-in perks like the ability to customize your finishes, choose your location in the building and take advantage of preconstruction pricing opportunities, buying into a condo that is still in the construction phase can help you make a wise investment, whether you are new to the game or an experienced investor.
Once you’ve made the decision that you’re ready to buy a condo and want to go with a preconstruction unit, the next choice to make is which unit is the best for your situation. Whether you are going to be living in the unit yourself or are buying it as an investment opportunity to rent out, there are several factors to consider. Keeping your goals in mind, use these tips to help choose your perfect space.