Buying a preconstruction property in Toronto can be a daunting task-but the rewards can be extremely lucrative. We at VIP Condos Toronto have compiled a list of several strategy tips to help you make your investment a success.
Seek Out Up-And-Coming Neighborhoods
The first key investment strategy tip involves neighborhoods where prices are currently low is often a shrewd financial decision-in a city like Toronto, those prices will not stay low for long. Be on the lookout for neighborhoods that are primed for transit upgrades, community improvements (such as public realm upgrades) and locations in close proximity to high-priced districts. Click here for info on the city’s diverse list of neighborhoods.
Be Wary Of Your Financial Limits
This may seem like an obvious rule of thumb, but with such high stakes surrounding your investment it cannot be stated enough. At the beginning of the process, you should have a clear idea regarding how much you can spend on your down payment, which will determine whether resale or preconstruction is best suited to your needs. For example, preconstruction condos normally require 15% down in the first year while resale can range from as low as 5% up to 20%.
Closing costs must also be taken into consideration. For preconstruction, this includes taxes, legal fees and development charges. If you don’t plan on making your property your primary residence, then you will also need to pay HST (which is capped at $24,000). Making sure your finances are in order will make both this and the down payment go much more smoothly.
The Longer-Term Your Thinking Is, The Better
Housing prices in Toronto continue to experience high rates of year-over-year growth, which has ensured maximum equity gains for homeowners. The longer you have ownership of your property, the greater these gains will be. Equity can then be leveraged into other investments via HELOC loans, more info about which can be found here.
- Home Buyer Guide & Tips