The Benefits of Buying Pre-Sale Condos (And a Few Things to Keep in Mind!)
Purchasing a pre-sale condo has many benefits. You get a brand new space that fits your needs and style and you are able to customize your purchase by picking color schemes, layout, extras, parking, storage etc. Here are some other advantages to buying presale:
When you purchase new, you have the peace of mind knowing that your property is covered by the 2-5-10 year warranty program that is required for all new construction.
• Potential to Make Profit while you wait
Purchasing a pre-sale in rising market can make you money while you wait for construction to complete without the monthly expense of a mortgage payment, property taxes and strata fees. If you buy presale at a time when real estate prices were lower than when the property completes, you can make a nice profit by the time the building is completed. The ROI is why presales are so popular with investors.
• Delay in mortgage payments
You will not have to start making your mortgage payments until the property completes. This will give you more time to save money for the closing costs and any additional down payment you wish to make.
• Cooling period
When buying pre-sale condos, you have a seven-day cooling period, during which you can reconsider. Make the best use of this time by hiring a real estate lawyer to go through your contract. If you change your mind, you can take back your deposit without having to pay for any penalty.
Despite the advantages, presale purchases are not for everyone. There are certain things you should keep in mind while purchasing a condo that is still in the blueprint stage. Let's discuss these below.
• Pay attention to the build time
Build time is extremely important. You have to make sure that the build time suits your plans. If you want to move into your new condo in a month or so, then it is highly unlikely you will find a pre-sale condo, except for “move-in” ready condos. Make sure you inquire with your developer about the build time and keep in mind that delays are common and completion times can change.
• GST is payable upon completion
You will have to pay 5% GST on top of the purchase price. If applicable, the buyers’ lawyer or notary will submit the GST rebate on the purchasers’ behalf. Be sure to discuss with your accountant before proceeding with the purchase to find out the tax implications of your purchase.
• Your down payment can be higher than resale condos
When it comes to pre-sale condos, down payments are usually 20 percent, whereas in some cases you can but as little as 5% down while purchasing resale condos (although in this case you would require mortgage insurance).
• Know that your fees may increase after a few years
Your condo fee may be low at first, but chances are it will increase over time. After two or three years living in your condo, don’t be surprised if your strata increases your monthly fees. Make sure you calculate this in your budget.
If you interested in a good Pre-Sale Investment or know someone looking to purchase a condo contact us to take advantage of the following benefits offered to our myvancouverlistings clients on select projects:
Contact us to secure your VIP access to the hottest new presale projects in the Lower Mainland.