Canadians are mad for condos. A recent IPSOS-Reid survey of adults in Montreal, Toronto, Calgary and Vancouver found that 35 per cent would consider a condo as their primary residence. If you are one of those people, here are some points to keep in mind while shopping around for a brand new condo, either for yourself, or as an investment:
1. Invest in an area that is at least five years away from saturation, and try pick a project that is destined to be the jewel in the new developments.
2. Find and acquire “investor units”. For more popular developments, by the time you walk into the sales centre, they’re all gone. So get on the developer’s investor list, and be ready to fork it out when new projects come up.
3. It’s new. No one has lived here before you. Everything should work. You hope. Minimize risks by buying from reputable builders. A little due diligence will reveal if the builder is decent and if they will correct any deficiencies quickly.
4. Advertised move-in dates are usually very optimistic. If you intend on occupying, plan on 6-12 months delay.
5. Invest in buildings with great amenities. Units in these buildings are easier to rent, and easier to sell.
6. Closing costs have a nasty habit of creeping up at closing, so insist on getting yours capped in writing before the end of the cooling-off period.
7. Occupancy fees are the charges you must pay the developer during the occupancy period (you got the keys but the building is not yet registered). You could reduce them by picking a unit on higher floors. Condos get occupied from the bottom floors up, and registration happens at 3/4 full, so high floors have shorter wait time.
8. Get out when the going’s good. Timing this right requires skill and luck. Some buildings appreciate quickly within the first couple of years, then lag behind.