For those looking to purchase a condominium in Toronto, the big question is whether to buy something already built, or to invest your money in something that doesn’t physically exist yet. The latter requires foresight, research and preparation. Being aware of your condo’s future neighbourhood is a must, as is being aware of the developers reputation and track record.


Some of the most important factors you should consider when purchasing a new development condominium are:


1. Area amenities

2. City plans for the next 10 years

3. Transit availability and score

4. Parking/Garage options

5. Price per square foot

6. Market value

7. Comparable units in the same building

8. Comparable units on the same street

9. Growth/appreciation

10. Floor plans

11. Condo amenities

12. Features and finishes

13. The developer’s reputation


Investing in real estate is a long term game which requires a long term game plan. Don’t be surprised if you have to wait up to 5 years to see returns, regardless of whether it is a re-sale or pre-construction condo. You should also be considering the needs of your potential tenants if you are planning to rent the unit out.



Pros of buying a pre-construction unit:

• Customization! You may be able to choose certain finishes, paint colour, flooring and appliances. If you are savvy when it comes to design and the needs and wants of potential tenants, your investment condo will be in demand in today’s and tomorrow’s rental market.

• Cost per square foot is a tremendous value compared to re-sale condominiums and certain other real estate investment opportunities.

• Smaller scheduled payment structure gives you more time to save up. Your total deposit usually equals 20-25% of the purchase price by the time you move in.

• Brand New Everything! Best amenities, technologies, and finishes. Re-sale condos can be dated, depending on the age.

• Lower maintenance fees. New buildings require less maintenance and therefore fewer increases in fees. And no building renovations for at least a decade (one would hope)!



Cons of buying pre-construction:

• You are buying something that only exists on paper and in models. It can be unnerving making what could be the largest financial purchase of your life only having seen a “virtual” representation.

• TAXES. Newly built homes and condos are subject to HST. However, you might be eligible for an HST rebate, if it is your principal residence. Do your research.

• Uncertainties. Many things can happen in 2-4+ years. The developer may have difficulty selling enough units to get construction started. Construction may also be delayed due to unforeseen circumstances. There have also been instances where the finished project looks significantly different than the renderings.

• Freezing up your capital for 2-4 years (the time it takes to sell and build the units). This is a long time for your money to be tied up. The required down payments for pre-construction condos are also usually more than their re-sale counterparts.

• Difficulty in determining market value. Since you have no previous sales to base market value on, this can be tricky. Rental income (and therefore cash flow) is also more difficult to determine on your investment.



Whether you choose a re-sale condominium or a pre-construction, you should be well aware of your preferences, your budget, and how much risk you are willing to assume. It is always a wise idea to consult with a Realtor and a financial planner to review all options before you buy!