IntroductionIn most big cities, it’s not unfamiliar to seecondo developments dotting the skyline,whether under construction or alreadycompleted. Investing in a new condo may seemlike an easy decision for a lot of people, butthere are several important things to considerbefore you hand over your money.
Things to Consider When Investing in a Condo• The Developer• The Price• Location• Logistics• The Numbers• Your Plan• Common Mistakes• Take Your Time
The DeveloperWhether the condo development is still under constructionor it’s already up and ready to go, the developer should beone of the things you consider before investing. Not justanyone can put up a quality condo project that will stand thetest of time. Keep in mind that it’s easy to get caught up inthe hype surrounding a new condo development. Developers spend a lot of money on marketing, and if youdon’t know what to look for you can get seduced by all thehype. Look for a developer that has experience and aportfolio of quality, successful projects, preferably in the areayou are looking.
The PriceThe price is an obvious thing to consider whenyou want to invest in a condo. Just make sureyou do your research so you know the pricethey are asking is fair for what you’re getting. Ifthe market is heated or that condo is in atrendy neighbourhood, you may have to pay aninflated price to get what you want.
LocationIf you want to invest in a condo that you plan torent out or sell at a later date, it’s importantthat the building is in a favorable location andneighbourhood. Take a look at the crimestatistics, rental and resale stats and even thetourism statistics for that area. No area is goingto be perfect, but it can’t turn people away,either.
LogisticsDevelopment logistics such as the overall size ofthe project, the designer, layouts of the condosand the amenities are all importantconsiderations. Look for a project that seemsto have its feet on the ground and is going tocreate a community of condo owners ratherthan a spectacle.
The NumbersThis comes back to what your plans are as aninvestor. If you’re looking for rental income,you have to run the numbers to make sureyou’ll be bringing in the kind of income youwant and when that may start happening. If thenumbers don’t make sense, it won’t end upbeing much of an investment for you.
Your PlanIf you’re going to invest in a condo and thatinvestment is going to bring you a return, you musthave a solid plan. You must know what you wantto accomplish, who will manage your property,how much you have to pay capital gains taxes, aswell as any other detail that surrounds the sale.Take the time to make a specific, detailed plan soyou’ll know exactly where you stand and exactlywhen to take action.
Common MistakesSome of the common mistakes that people makewhen they want to invest in a condo include:Misunderstanding the taxes and tax implications.Not checking to see if your view will be obstructedby new construction projects close by: • Assuming this property will appreciate. • Not reading industry reports or asking the right questions to developers and real estate agents. • Ignoring clear warning signs such as the developer having issues with the city, poor curb appeal, sluggish sales, prices that are too good to be true or negative publicity for whatever reason.
Take Your TimeWhile there is always a time to take action and jump in,investing in any form of real estate can be risky and itusually pays to take your time. Surround yourself withpeople who have been there before and will help you makethe right decisions. Create a timeline, but look at manydifferent deals before taking the plunge.Don’t be afraid to use creativity when necessary and act onyour instincts. If you don’t box yourself in with boundariesand rules, you’ll be the one who ends up on top moreoften than not. If you respect your capital and usepatience, you’ll find a condo that will continue to pay youback for years to come.