INVESTING

Why Successful People Are Now Investing In Condo Developments

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Posted on September 17, 2018

Louis Tavakoli

Broker

“You must spend money to make money.” This age old saying has proven to stand the test of time; and for good reason. Successful people always seem to have the incredible skill of making their money work for them, and while there is no secret formula, there are measures you can take to maximize your success rate as an investor . Top investors know through consultation and experience precisely where to invest their money to maximize their Return On Investment (Gain From Investment-Cost Of Investment,) while minimizing their risk.

These same people are now focusing their investments towards pre-construction condo developments. Read on to find out why this profitable trend is on the rise:

i) High Return On Investment

Real Estate investing is widely known as one of the best pieces in your investment portfolio. While it is wise to diversify your options with RRSPs, mutual funds, and stocks, Real Estate investments are a necessity as they allow you to leverage limited investments to make greater returns.

The growth of your Real Estate investment appreciates with the property’s total value, unlike stocks and mutual funds which appreciate based exclusively on the invested amount. This allows your investment to grow with the market, and you only need to put a down payment on a portion of the value of the property. You put in a 20% downpayment on the property while it appreciates at 100%. Not a bad trade off!

ii) Dispersed Down Payments

One of the many upsides to choosing a pre-construction condo as your Real Estate investment is the benefits of dispersed down payments. While most Real Estate purchases will require an out-of-pocket 20% down payment on a property (20% of $350,000 is $70,000,) pre-construction projects will have structured deposit schedules that spread the down payment out over the course of construction.

By spreading the down payment as 5% increments over several months (varies by developer), this allows you to schedule your budgeting with a bit more flexibility as you prepare for occupancy.

iii) Cheaper Than Resale

While you may not see immediate returns on a condominium project until construction has reached completion, the project will avoid many fees that are standard for most resale homes. When looking at a condominium, feel free to cut closing fees, inspection fees, and even realtor fees (paid for by the developer.)

The reduced cost of a condominium (in comparison to resale) allows you to be competitive with your pricing when leasing your property, which will decrease vacancy. You should ultimately end up with more money in your pocket if you play your cards right!

iv) Hands-Off Investment

Smaller units are much easier to rent out to tenants. Once you find the right builder and neighbourhood, you are essentially ready to rent right away without having to worry about any kinds of repairs or touch-ups. It’s ready when you are!

The obvious downside to investing in a Condo Development is the lack of any instantaneous cashflow with your investment. You may have to wait up to 3 years to start seeing any return, however, with a relatively low cost, low maintenance, and high appreciation, a Condo Development may very well be the right investment for you. If you would like to talk more about any kind of Real Estate investments that are specific to your needs, feel free to call me or email me at any time and I would love to give you my advice.

To find out more about a lucrative Pre-Construction Project in your area, visit Sage Prestige Kingston (link).

Email: Jordan@reri.ca

Phone Number: 613-483-4052