Pre-Construction vs. Resale Investments
By Condo Culture
Not to be missed. Great potential. Too good to pass up. When it comes to condos for sale, we’ve seen all the great cliches used and abused. Being part of the community here in Kitchener-Waterloo, we avoid those overused hyper words and focus on what’s important–showing you the investment opportunities in one of North America’s fastest-growing communities.
When it comes to buying condos for investment opportunities, you have two paths to choose from. You can buy a unit during the pre-construction phase, such as the upcoming Wallaceton Urban Towns in Kitchener. Or you can look at purchasing an existing unit in a developments like 155 Caroline Street Private Residences or Circa 1877–the signature development that marks the entrance to the shops and dining in Uptown Waterloo. (It’s even got its own semi-controversial public art installation!). You can find an overview of existing units in the region and all pre-construction listings on our site.
Enough with the monkey business, let’s get to the tale of the tape.
Early bird gets the worm
Ok, yes, we used a cliche–but in this case, buying during the condo development pre-construction phase can help improve your return on investment. When it comes to short term returns, buying your condo unit during pre-construction gives some great advantages.
Buying your investment condo during pre-construction gets you day one pricing. As an investor, it means lower upfront pricing and an extended deposit schedule. You’re purchasing your condo at today’s market rates for a project that will be completed a year or more from now. On average, the price per square foot appreciation is high for pre-construction investments versus investing by purchasing an existing unit.
Next, buying a condo as an investment during pre-construction is the real estate version of “...set it and forget it.” You can sit back and let the value of your condo unit appreciate with a low level of management between signing and taking occupancy.
When you’re buying a condo as an investment property, you want to keep your costs as low and manageable as possible. Buying your investment property during pre-construction also guarantees your maintenance fees for the first year of ownership.
Buying during pre-construction is more than just lowered costs–it also means more choices. With pre-construction sales, you have your choice of unit model and location. Waterloo and Kitchener offer spectacular summer sunrises and sunsets. Buying early lets you pick which one to enjoy–and the one that will make your investment property even more desirable. Beyond the unit model and location, you have more control over the fit and finish of your investment. The options you choose–including storage space, floor level, and unit exposure can make a major difference when you’re renting or selling your condo.
Location, location, location
Before we convince you that buying your investment condo during pre-construction is the way to go, let’s talk about existing units. At the core, buying an existing unit is less speculative than buying a pre-construction unit. They’re both great investment opportunities, but with existing, you’re seeing what you’re buying with fewer surprises.
Downsizing is part of many people’s strategies when it comes to investing in condos. Construction delays can sometimes happen. An existing unit gives you the flexibility to self occupy right away and rent later. No one likes surprises, especially your family when you suddenly have to move in with them because your unity isn’t ready when your current home sales close.
When you buy pre-construction, the waiting can be the hardest part. Investing in an existing condo unit gives you more immediate rental cash flow opportunities. Pre-construction gives you day one pricing, existing units can provide the ability to start building equity on day one.
Buying an existing condo until also has the added flexibility to find units in condo developments in Kitchener and Waterloo where you can build value. There are a few condo developments built along the region’s ION Light Rail Transit line that have great renovate and flip potential.
Your next step
Either way, investing in a pre-construction or an existing unit are both tried and true methods to maximize the return on your investment. We’d love to show you your options here in Kitchener and Waterloo. Contact us today to schedule a tour.