Not all real estate is created equal. When you’re looking to spend your money on a property in Toronto, how do you know a good deal from a bad deal? Whether you’re buying as an end-user or an investor, finding the right pre-construction opportunities to suit your personal goals is why an experienced Realtor is worth their weight in gold.
Toronto pre-construction real estate has evolved considerably since I bought my first property more than 14 years ago. Toronto pre-construction condos were, more often than not, priced below their resale counter-parts and people quickly started realizing there was money to be made with this type of investment. As the builders caught on, they started to raise their prices but the precedent was set: buying toronto pre-construction real estate was the best way to see a great return on investment.
The thing to keep in mind is that both the buyer and the builder want to turn a profit from the property and while it’s fair to expect the builder to provide a quality product, it’s not their job to ensure you’re getting a good deal. This is where an experienced Realtor — preferably one who is an investor themselves — is essential in navigating the dozens of projects constantly on the rise.
They are your advocate and their job is to guide you towards the best Toronto pre-construction opportunities that are in-line with your personal goals. This Realtor should have your best and long-term interests in mind as well, focusing on keeping you as a long-term client rather than on a single transaction.
The first question I ask buyers is whether or not they’re buying as an investor or are planning to live in the property. One can justify a premium price-point if you’re going to live in the property yourself. Even if the return on investment (ROI) will be lower, you’re investing in a property that suits your needs and lifestyle. The opposite may be true for investors who favour a good ROI. For investors, it’s sourcing pre-construction opportunities with the best profit margins.
In today’s hot condo market, prices are at an all-time high and your Realtor should be able to paint a picture as to why the prices for a particular Toronto pre-construction property have real value or not. Just because a condo is being built in the heart of the city, doesn’t instantly make it a worth-while investment.
Don’t fall pray to the idea that every pre-construction condo you’ve been show are the best pre-construction condos in Toronto, just because they are new builds. There are a number of factors that matter. For most investors ROI is the be-all and end-all factor and not all Toronto pre-construction condos are going to get you the results you want.
There are a lot of factors to be considered before deeming a deal good or not. First things first: Look at the data. History is the best indicator of trends in the market and different areas will yield faster growth rates than others. Beyond that, comparing floor plans to similar comparable sales in the area is the best way to gauge a good deal. If the purchase price far exceeds the average comparable for that area, it’s likely not a wise investment.
Is the builder reputable? How long have they been around and how many projects have they built in the past? If their previous properties perform well on the resale market, that’s a strong component for a good deal.
Factor in future developments, infrastructure, or transit expected in and around the area that can have a positive impact on the value of the property a few years down the line. Projects on the subway line will typically see faster price growth. Even in less desirable neighbourhoods, those projects can perform better than those in central locations with no direct subway access.
What about inventory? Realtors have a knack for spotting up-and-coming neighbourhoods. If a new condo is being added to an area where inventory is low and is expected to remain low, those deals hold promise. Your Realtor can guide you towards the types of layouts that will rent for a premium when the property takes occupancy.
This sounds like a lot, because well, it is a lot and this is just the tip of the iceberg. I’ve devoted my entire career — and now my life — to Toronto real estate. Just like studying for a test in college, I’ve researched and studied the heck out of this market. Of course, the proof is in the returns my clients see. All of my investors from 2018 have already seen great returns on their investment properties, between 8% and 28%. I’ve made it easy for you to check out some of those details, click here to review the returns. You can also check out what my clients have had to say here.
The best way to ensure you are served up the best pre-construction condos in Toronto is to work with Realtors who get Platinum Pricing from builders. Sign up as an Insider and you’ll be the first to receive lucrative investment opportunities as soon as they become available. Did you know that each pre-construction project launches in phases? Our Insiders get access to the first phase of our preferred investment opportunities, which means they get the lowest possible price for that building. Spring Launches are around the corner. Sign up as an Insider today!
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