Purchasing a pre-construction condo is like buying a future in the stock market. The buyer purchases at present prices, believing that the prices will rise over time. In general, prices rise. Pre-construction condos are a good investment because they are often in gentrifying neighborhoods, where there is a high likelihood of appreciation in future years. However, there are a few things to keep in mind before investing in pre-construction condos.
For starters, pre-construction condos are much cheaper than finished condos. You can enjoy the same amenities, as well as a more prestigious address. You can also negotiate a lower price because the entire development is new. Furthermore, you can avoid bidding wars and receive the best price. In addition, pre-construction condos are usually in high demand areas, which means that the price can be significantly lower than an existing condo. However, make sure you can handle the ups and downs of the construction process.
If you are planning to buy a pre-construction condo, you may want to keep in mind the risks associated with it. Developers will often offer exceptional deals when selling these units, and they are usually cheaper than existing condos. However, keep in mind that the price will likely increase with the completion date. This is a great opportunity for investors who want to maximize their investment. If you plan on reselling the condo in the future, consider this risk.
Another important issue to consider when buying a pre-construction condo is the square footage of the unit. The documents for the condo will indicate the Typical Area of the unit, but the actual Unit Area may be higher or lower than the Typical Area. If the building is in a humid area, the unit owners will have disproportionately higher expenses than residents. Buying a pre-construction condo may not be a good investment unless you’re willing to bear the risks and expenses of a mixed-use project.
In spite of the fact that investing in a pre-construction condo comes with a sizeable amount of risk, there is a possibility that the potential rewards will surpass those dangers. The cost of a condo that has recently undergone construction will not be known right away. As a result, it may cause your return to the city to be delayed.
On the other hand, prospective purchasers can choose the benefits that come with new developments rather than flats that have been previously owned. Buyers can anticipate getting a better bargain if they purchase a pre-construction condo earlier on in the development process, despite the fact that these condos are more expensive.
If you buy a condo during the pre-construction phase, you need also be prepared to wait a few years until the structure is finished being constructed. In addition, there is the possibility that the developer will not live up to their responsibilities. By completing some preliminary study and looking at the developer’s previous work, you can avoid this situation. You also have the option of physically going to the location to determine whether or not it is the right one for you. If the developer is already well-established in the market, there is a good likelihood that they will keep the promises they made to you.