I have noticed there are many first timers looking to "invest" in a pre-construction Toronto Condo. They have seen their friends and colleagues make good returns on their condo investments. These first timers are itching to invest but they aren't sure what to do. Here are five things you should do before investing.
1. Go to your bank and find out what is the maximum loan you are pre-approved for. You really don't want to buy something you can't carry at the time of closing.
2. Now that you have a budget, talk to a Realtor who deals with Condo Investors. VIP Realtors like myself get early access to projects before they open to the general public. In addition our clients get bonus-cash incentives. So those Investors on my contact list - 1. Are first to find out about new projects 2. get the best choice of suites and 3. get the best price. 4. as an added bonus I sell/ assign their suite for a small FLAT FEE.
3. Invest in a location that is showing population and economic growth. Invest in where multiple phase construction is taking place over many years. Most builders increase prices by 5% or so in each successive condo release.
4. Ensure you get an Assignment clause in your contract... even if it costs you $1000, $2500, $5000 to assign your condo unit. Assignment clause protects you from unforeseen circumstances and gives you options when the time to close is near. For many, the Assignment clause is the sole reason they invest. They know if their economic circumstances change and they can't close on a deal, they can still make money by sharing the equity gained with a new Buyer.
For example you buy a condo at $200K. Three years later it is now worth $260K. Since you can't close on the unit, you offer to assign it to a Buyer for $240K. You still make $40K and the Buyer is happy to have paid $20K less than market value. I call Assignments - WIN-WIN- transactions for Buyers and Investors.
5. Work the numbers - many projects require 20% down, other's 15% and a few will let you buy with 5%. To invest you should have at least 5% in savings... I don't recommend people invest unless they have a personal stake in the investment.
Itching to learn how to invest in Condo Real Estate? Need a trusted Realtor to guide you. Email/Call me for a no-obligation, stress-free consultation whenever you are ready. Remember send me an e-mail to get added to my Home Owner/ Investor monthly newsletter.
Jas Jagpal,BSc. York University Sales Representative
E: jasjagpal@rogers.com Cell: 647-272-6629 W: www.JasJagpal.com
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© 2010- Jas Jagpal,
Markham Boxgrove Homes, Morningside Heights Homes, Scarborough Town Centre Condos, Toronto Real Estate: www.JasJagpal.com
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