Insider Guide to Buying Pre-Construction Condos in Toronto

Insider Guide to Buying Pre-Construction Condos in Toronto

By Ilan Joseph, Broker, ABR®, e-PRO®, AMP® | © All rights reserved

 

OUR TOP FIVE EXPERT TIPS:
 

#1. EARLY ACCESS

Similar to the Stock Market, the Toronto Condo Market has initial public offerings (IPOs) or New Product Launches. These launches are held in stages, targeted to exclusive groups and offered at different price points at each stage. Your goal is to be purchase at the Platinum Agent Level for best pricing, floor-plan options & exposures.
 
pre-construction condos
 

#2.  PREPARE IN ADVANCE

Despite what you have heard in the press, the Condominium Resale Market is one fire and prices are up, way up! In fact, they are up 24.6 % versus the same time last year; and, Toronto’s new construction launches have been selling out in just days.  The current pre-construction unsold inventory is at an all time historic low.  In Toronto, most projects never reach the general public so the opportunity is gone before you knew it was even there!  In light of this, it’s important to do your homework and due diligence well in advance.  We recommend speaking with your Mortgage Broker & a Real-Estate Lawyer that specializes in pre-construction well in advance so you understand all of the nuts and bolts before putting pen to paper!  And, meet with your Platinum Real Estate to discuss the process and strategy so you’re educated about “dos & dont’s” before ever stepping into a high pressure showroom.
 
pre-construction condos
 

#3 LOCATION, LOCATION, LOCATION
What should you consider when thinking about neighbourhoods?

  • Areas that will be considered up & coming in 5 – 10 years time
  • Neighbourhoods that are undergoing rapid growth & gentrification
  • Communities where demand for sales & rentals will be strong even in the event of a downturn
  • A project that will attract end-users & quality rentals 
  • Developments near or on transportation lines
  • A location near commercial & office hubs, indication future growth and expansion
pre-construction condos
 

#4. ADVANTAGES OF BUYING PRE-CONSTRUCTION?

  • The Purchase does not show up on your credit bureau until closing; 
  • Greater leverage on your return on investment (ROI);
  • Down-payments can be spaced-out to improve affordability so you can capitalize on a line of credit;
  • While under construction you have no management headaches & your profit is passive;
  • In five years time, the unit is brand-new vs an outdated and aged building for resale purchases;
  • Your suite & deposits are covered under Tarion Warranty; and,
  • Generally, newer buildings have more contemporary finishes and better Energy Ratings.

pre-construction condos
pre-construction condos
 

#5.  WHEN PURCHASING PRE-CONSTRUCTION HERE ARE SOME CONSIDERATIONS:

These are only some of the items we review with all of our
Pre-Construction buyers:

  • Reduce or remove any assignment fees
  • Permit rental during the Occupancy Period – reduce or remove any associated fines
  • Capping builder closing costs (based on your suite size)
  • Reduction in Administration Fees (i.e) administering the deposit, Law Society of Upper Canada, etc.
  • Request outdoor balcony measurements 
  • Requestsutie measurements from Architectural Drawings
  • Request information about materials used for shared walls & request line drawings 
  • Location of Garbage Receptacle & Outdoor Bins
  • Location of Parking Entrance &Exist 
  • Maintenance Fees, Utilities & Rentals 
  • Parking & Locker Allocation 
  • Over-Head Lighting & Electrical Upgrades 
  • Refraining from Cosmetic Upgrades 
And, the list goes on…

 

Did you know Toronto has the strongest Condominium Market in North America?

With immigration projected to remain strong throughout the next decade (that means another one million+ people, by the way!) at a time when current pre-construction and available resale inventory are at all time lows, the Condo Market will continue to be a good place for investors both local & abroad to invest their money; especially given the affordability compared to other major cities and, the recent abolishment to the OMB!

In this fast paced market, with so many projects rolling out at the same time, it can be overwhelming to both the novice and the seasoned investor alike when considering a pre-construction purchase. But, we’ve got you covered!

 


Ilan Joseph is a Real Estate Broker with Sutton Group and is co-founder of a 10-person award-winning Toronto, Thornhill and Vaughan real estate team.

You can find him on LinkedIn, Twitter, YouTube and Google+.

Since 2002, Ilan has provided thousands of buyers and sellers valued advice and service, enabling them to reach their real estate goals.

He’s kind of like the Bruce Willis of real estate.