Making an investment in a Condominium Pre-Construction Unit
The idea of investing in pre-construction condominiums is one of the best ways to increase your wealth. If you buy the pre-construction condo unit the value of your investment will increase beginning the moment you buy the condominium unit. It will appreciate for a long time till you are ready to let your condo.
This investment strategy for the long term is an excellent option to earn passive income. What is it that makes investing in real estate one of the most profitable choices you can make for your future is the fact that you’re completely in control of the investment.
Real estate is like all other investments. It’s expected to go upwards and downwards It will be up and down, and that’s where you are in total control. When the price is falling you may decide to keep your home or, when it’s at its highest that you’re ready, you’ll get a good profit on capital (ROI).
There are a myriad of reasons to invest in the pre-construction market is the most profitable financial choice you could make.
Pre-Construction Condos vs. Other Investments
As with all sectors, real estate has an investment that cycles both up and down however the major distinction between investing in a pre-construction condos and other investment options is that you are in total control.
In the market for stocks every business that you have in your portfolio could be insolvent, which can cause you to lose all of your funds, but if you own a condo your portfolio will not go anywhere. If the market isn’t doing well you have the option of not to sell. But when it’s up, you could sell it to increase the profits you earn.
The purchase of a pre-construction condominium requires more capital upfront than investing in mutual funds, or Real Estate Investments Trusts (REITs) However, when you buy an investment property that is tangible you gain leverage over your funds. This lets you purchase an investment vehicle that is more desirable and earn a better ROI (Return on Investment).
Another benefit of putting your money into a pre construction condo Toronto when compared to other investment options is that you are able to utilize limited funds for higher yields. When you invest in mutual or stocks, funds will only give you an income dependent on the money that you put in, however, with the real estate market, you get your return on the total amount you spend, regardless of having to pay an initial part upfront.
Annual growth of $25,000 Equity at $5,500 Equity growth per year at 5 %
Condo Price: $500K
The distinction between investing in condos and traditional financial products like the mutual fund, stock as well as RRSPs is that you will have more control over the condo investments. This means that the returns on shares and funds will depend on the primary investment, whereas real estate investments grow according to your property’s overall value.
One of our favorite phrases is that you don’t make money selling your home, but you earn it when you purchase! It’s because you begin earning capital appreciation the moment you have completed the purchase.
Pre-Construction vs. Resale
The most obvious savings in the pre-construction market stems from purchasing a condo in a project that isn’t constructed yet. However, there’s more to it. When you purchase a condominium unit during the pre-construction phase, there are many advantages to consider, such as:
First price, paying for the initial and lowest price
First appreciation and appreciation from the very beginning
You select units based on a first-come first serve basis.
You are able to select the floor plan/layout as well as the levels and views that will best suit your needs.
To invest, selecting the most suitable unit can maximize the return you earn when you rent out your property, and when you eventually sell it. Pre-construction offers the lowest cost available, and there’s no need for expensive bidding wars. One of the most common misconceptions about buying an apartment unit that is pre-construction is that you will not see immediate returns but that could not be further from the truth! The highest value and capital appreciation immediately after you have completed your purchase. If you’ve made a purchase in a growing neighborhood it is investing directly in an area where new jobs will be created and new residents are expected to move in — which , in turns, will create more demand for the neighborhood.
Even though you are able to purchase a resale apartment and rent it out, resale condominiums do not appreciate like new construction units. This is due to the fact that people are looking for new instead of previously owned, and will be paying higher for new because they’re looking for contemporary finishes as well as the latest technology and amenities, as well as the extra costs that come when managing an older house or unit. Furthermore, maintenance charges are higher for resales units due to the repair required throughout the building’s aging.
When the condo unit that is pre-construction is completed and is in a position to lease it the unit will see increased rent and demand compared to similar rental units that are resold Like many other things, that are brand new, they will always be superior to used-old.
Another benefit of buying an existing unit is that you’re purchasing an apartment that is repayable by future rental rates. If you purchase a property for resale, you’ll lease it immediately and will be paying for your monthly expenses by renting it out at the current rental rates. In the pre-construction phase the purchase price is today’s market price, and then repay it with future market rates for rental. In the last ten years, the rental rate has increased at an average annual increase of 4%, and we anticipate that this trend will remain. Therefore, if you’ve purchased an apartment at today’s price, you could charge rent that is based on the market in 6-10 years’ time and increase the positive cash flow.
Why Pre-Construction Condos In Toronto Are The Best Investment
Making an investment in a Condominium Pre-Construction Unit