Often I’m asked about buying from plans in new developments. Here are some points to keep in mind while shopping around:
+ You can make a lot of money on new developments, but only if you know what you’re doing and who to buy from, and you won’t learn how-to from watching real-estate TV. Find the experts and work with them and them only.
+ Invest in an area that is at least five years away from saturation, pick a project that is destined to be the jewel in a new developments, with excellent city planning, expected positive cashflows with increasing property values.
+ Find and acquire “investor units”, simply put, they make the most amount of money, either as rentals or re-sale. However, by the time you walk into the sales centre, they’re all gone, so get on the Investor list, and be ready to sign some checks when new projects come up.
+ It’s new. No-one lived here before you. Everything should work. at least in theory. Minimize risks by buying from reputable builders and hope that the builder is decent and will correct any deficiencies quickly.
+ Advertised vs. Real Move-in Date. Occupancy move-in dates advertised are usually very optimistic. If you intend on occupying plan on 6-12 months delay.
+ Amenities. Invest in buildings with great amenities, your tenants will thank you and when time to sell, you’ll have the advantage of having the facilities.
+ Closing Costs have a nasty habit of creeping up at closing. Insist on getting your closing costs capped in writing before the end of the 10 day cool-off period. You’ll know what to expect and how to prepare.
+ Occupancy Fees are the charges you must pay the developer during the occupancy period (you got the keys but the building is not yet registered). Try and avoid paying Rent or Occupancy Fees, neither is good.
+ Get out on time. Some buildings appreciate quickly within the first couple of years, then lag behind. Understand the entire urban realty market and switch your investments around to the next best areas and buildings.
Yossi Kaplan is a Realtor with Harvey Kalles and his website is www.urbanrealty.ca
© 2007 original content by Yossi Kaplan
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Image of 650 King Street West. For entertainment only and without relation to the article.