19 November 2013 ~ 0 Comments

Are New Build Condo Buildings a Good Deal?

Weekly I am inundated with offers from builders and or their marketing/sales teams on incentives for unsold inventory on various sites throughout the GTA.

$20,000 Cash Back to your Buyer! Five Percent Commission For The Agent! Free Maintenance Fees For Two Years and a B.B.Q.!!

How do you know if this is a good deal? I’m often asked by clients (mostly investor ones) are new condo units a good deal in today’s marketplace?

While no one has a crystal ball on what the future values of real estate will be, following some basic fundamentals will help you buy not only a good unit, but also if you are getting the deal you are expecting.

For starters, answering this question can be a complex one and is not a one size fits all response. For a more customized answer contact me directly.

From an investment perspective buying something that isn’t built yet and may not be for 3-5 years, takes a bit of skill, knowledge, luck and blind faith.

  • Is the unit(s) that is being offered for sale, desirable for a wide range of buyers both now and in the foreseeable future?
  • Will there be anything impacting the unit(s) location in a negative way from a resale perspective?
  • Is the builder burying the incentives in the purchase price or additional costs upon closing?
  • Does the unit have mass appeal for both rental and resale?
  • What will mortgage rates be like 3-5 years down the road, when the project is built and registered?
  • Is the quality of finishes and construction worthy of the price?
  • Is the location of the building in an area that is rising in demand, flat, or a decreasing one? Both rental and resale.
  • What are my closing costs from the builder in total?
  • Future development fees and charges, what will they be like? (Blind faith)

These are some of the items you need to know the answer too in order to help determine if the unit you are buying is a good deal or not?

In my opinion today, new construction for the most part is still overvalued for the risks involved in purchasing something sight unseen and not built.  There are plenty of good inventories to select from in the resale condo market, that you can find better value in many buildings that have been built in the past three years. And you also get the huge benefit and comfort of knowing what today’s interest rates will be if you need to finance your investment.












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