I just didn't see it. After i purchased my first investment property in 2007, I didn't know what I had been getting myself into. I heard from everyone that real estate was a great investment, and I went together with that advice blindly. The whole process of purchasing a pre-construction condo opened my eyes towards the property game. If you aspire to invest in real estate by buying a pre-construction condo, you can study from my experience:
What are the advantages of buying a condo of all time even built?
The biggest help to investing in a pre-construction condo is time. You have the time for you to conserve and perhaps even try taking some risks. Once you're locked into a mortgage, it's tougher to take a few risks. With a pre-construction condo, you normally have a payment schedule. You will not need to bother about make payment on final 5% until you get the keys. This provides you time to get your finances to in which you would like them to be.
The other benefit is the potential appreciation of the property. It's not always the situation, but the worth of the apartment home should increase when you get the keys. You simply purchased a drawing. The goal is to try to negotiate and obtain as much of a price reduction as possible when purchasing the area. For example, I was capable of getting a parking space for $18,000. These days if you prefer a parking spot, it's going to cost as much as $50,000 or even more in Toronto.
What are the setbacks of purchasing a pre-construction condo?
The biggest problem is that construction could be delayed many times. Which means that you'll need solid living arrangements before you obtain the keys to your unit. If you're able to stick with your folks, this may 't be an issue. I endured my parents for quite some time while waiting for my latest pre-construction condo to become finished. It was brutal, but it allowed me to save cash. If you are renting a place, you might find yourself in a sticky situation throughout a delay.
You also don't have any idea what your expenses are going to be like. The maintenance fees and property taxes will change by the time you receive the keys to your unit. This might totally mess up your financial allowance. Imagine budgeting for maintenance fees of $200 after which finding out they now set you back $400. This is a serious dent in your monthly income.
You also need to cope with residing in a construction zone. When you initially get the secrets of your unit (based on your floor), there might be lots of work still going on. For example, my current unit still requires a door for that closet. The hallways and general amenities still aren't fully operational either. It's not no more the planet. Just something to think about before you purchase.
I enjoyed purchasing a pre-construction condo, also it felt like sweet victory after i moved in. However, there's definitely lots of risk involved whenever you buy real estate by doing this. It's not a path for everybody. Have fun with your property ventures.