To fund these developments, prospective condo owners have the option to pre-purchase units before they’re even built. These units are commonly referred to as a pre-construction. If played right, a pre-construction can be a fantastic investment.

This post is all about pre-constructions. It discusses the benefits and cons of purchasing one, how the buying process works, and what questions to ask before signing the purchase agreement.

The Pros and Cons of Buying a Pre-Construction

The value of pre-construction condos is hotly debated due to the various pros and cons. Because pre-constructions are not built yet, it’s an opportunity to purchase a condo in the future at today’s prices. Although you need to pay a deposit and downpayment now, these costs are more manageable than the downpayment and mortgage of a resale property.

Another advantage of a pre-construction is the ability to customize your unit, meaning you can choose the countertops and appliances in the unit. Speaking of appliances, purchasing a brand new unit means that appliances, cable wiring, alarm systems, and other fixtures are all brand new. The need to replace these fixtures likely won’t appear for the next decade.

Although these units may look like the greatest purchase ever in the showroom, there are a lot of downsides to them. First, what you see in the showrooms and in the sales brochures are often not the reality of what you get. These marketing materials are made to give you the best impression of the product. It’s common that maintenance fees are skewed towards the low-end and that completion dates are optimistic. So, if this is an investment property, it’s hard to tell what your expenses will be or when you can expect to start renting the unit out.

What’s worse than a delay is the potential that a pre-construction is cancelled entirely. This occurs when developers can’t secure financing, have zoning issues, or can’t secure enough pre-construction buyers, among other reasons. Though with variation province to province, you would get your deposits back in this case, of course.

Lastly, there are various fees, aside from the purchase price and condo fees, that you need to account for. There are not only closing costs, but also fees unique to new developments such as development and education charges. Even items such as the installation of water and gas metres may be part of your bill. This ultimately depends builder to builder.

The Purchase Process

How to Pay for a Pre-Construction

One of the biggest drawing factors to purchasing a pre-construction is that you don’t need to pay the downpayment all at once. It’s made in staggered payments, which vary builder to builder. One example could be

• 5% of the purchase price with offer
• 5% of the purchase price after 30 days
• 5% of the purchase price after 90 days
• 5% of the purchase price after 180 days

When paying a 20% downpayment, it’s much easier to pay the amount over half a year than all at once. This gives you the opportunity to secure the unit with only 5% of the purchase price.

Cooling Off Period

To make sure you’re not forced to make a decision due to the limited supply of units, some provinces regulate a “cooling off” period after you pay your deposit for a pre-construction. In Ontario, this is 10 days while British Columbia allows for 7 days. During this time, you can renege the purchase agreement without consequences.

The cooling off period is also an opportunity to do your due diligence on the pre-construction. This means bringing the paperwork to your lawyer to check for any red flags. The period also allows you to find financing for the rest of the purchase price.  

The Questions You Need to Ask before Buying

Who’s the builder? A condo developer’s reputation is one of the most important factors in buying a pre-construction. Due to the demand for condos in major Canadian cities over the past few years, many new builders have joined the game. These builders have plenty of capital and leverage but often lack experience, which results in a poor end product. It’s best to find someone with a good reputation who has had past projects with satisfied tenants. Researching the builder can also provide insight on how long their past developments were delayed for and if they delivered on the promises made in sales brochures and showroom floors.

Who are you buying this unit for? Are you buying the condo for yourself, for a long-term rental, or for a short-term rental? Make sure to check the condominium by-laws to see if short-term rentals are even allowed. If you’re purchasing for yourself, could you tolerate potential delays or not knowing who your neighbours will be?

Location: Of course, location is important. But keep in mind whether the area is somewhere renters want to live if you’re purchasing as an investment. It’s also good to look into whether the surrounding areas have been approved for development. It would be horrible to purchase a pre-construction only to discover a chemical plant is being built right beside it. Lastly, what’s the location prospected to be like by the time the development is done? Is the area going through gentrification or heading downhill?

A pre-construction condo can be a great investment. But make sure to keep in mind the benefits and downfalls of purchasing one. The payment structure and cooling off period are handy tools in the buying process, though you must make sure to ask who the builder is, who you’re buying the unit for, and about the location you’re buying into.

The post What You Should Know before Buying a Pre-construction Condo first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Keeping safe from Coronavirus is difficult for the over 1.9 million Canadians living in condos. One condo building in Calgary has seen the worst of this, as they reported 32 cases of Coronavirus in June. In this article, we provide tips on how to minimize your chances of contracting COVID-19 if you live in a condo building. We explain what condominiums are doing, or should be doing, to prevent a full-building infection and review what you can do as a tenant to avoid being infected.

What Condominiums Are or Should Be Doing

Your condominium building has a responsibility to prevent the building from a COVID-19 outbreak. Most condo corporations have done their part through additional cleanings, closing off certain areas, and communicating reminders and information to tenants.

Additional Cleaning and Sanitation

Like restaurants, malls, busses, and more, condo buildings must sanitize regularly used areas more often to prevent a Coronavirus outbreak. This is especially true for objects such as door handles, stairwell railings, elevator buttons, and more. Additionally, the cleaning supplies that your building uses should no longer depend on scent and cost, but its ability to kill bacteria.

It’s also essential that your building provides its residents with easy access to sanitation, such as hand sanitizer. We may lose track of what we touch and end up with germs on our hands. But if your building has hand sanitizer stations at key areas, it’s a reminder to sanitize our hands.

Closing Off and Restricting Common Areas

Condo residents spend a lot on their condo fees. These fees usually go to amenities such as the pool, gym, and concierge. Although there’s a particular entitlement to these amenities because of condo fees, your condo should stop access to pools, gyms, and other non-essential facilities. These areas are prime for COVID-19 spread. As infection rates slow down, your building may reopen these amenities, but they should do so carefully. One common trend with gyms reopening is for members to book time slots so that the space is not overcrowded. Each time slot should also have space in between for sanitation. Condo buildings should look to do the same with building amenities.

Although the management office was once a place to socialize with your building’s staff or ask questions and file complaints, your condo should restrict access to these areas. You and other tenants can still ask questions or file complaints via phone or email, where the risk of Coronavirus transmission is nil.

Communication with Tenants

Your condo building should communicate with its tenants on multiple fronts. First, although we’ve been told again and again to wash our hands, social distance, and wear masks, it won’t hurt for signs in your condo building to do it again. Everyone forgets, and a reminder is better than a case of COVID-19. If your building isn’t already doing this, it’s an easy suggestion for your condo management.

Your building should also inform everyone about the initiatives they’re taking to prevent the spread of Coronavirus and if there are any possible cases in the building. This information should be available through emails, if your building has your email, or through signs in the elevators or main areas. It’s imperative to know if someone in your building may have COVID-19 so that you can self-isolate.

Personal Safety Precautions

You’re ultimately responsible for yourself in avoiding COVID-19. While going through your building, whether it’s to leave or to come home, it’s important to sanitize your hand and wear a mask. Elevator etiquette has changed in the COVID-19 era, and it’s important to understand what new etiquette entails. 

Personal Sanitation and Wearing a Mask

Standard COVID-19 measures should apply in your condo building, even if it’s your “home”. This means you should avoid touching anything and everything. To open a door or press a button, carry a napkin so you don’t have to touch the object. Your shirt sleeve or elbow will work too – as long as you’re using something that doesn’t make contact with your face. Furthermore, though, ideally, your condo building has hand sanitizer stations around key areas, it’s always better to carry your own bottle.

When you’re in the lobby or a common area of the condo building, make sure to wear a mask. Some cities are even taking steps to mandate mask-wearing in condo buildings. Your mask shouldn’t come off until you’re in the comfort of your condo unit.

Elevator Etiquette

Elevators have been a key concern in the COVID-19 era. Elevators don’t allow for social distancing due to being confined in a small box with multiple people. Others may have also contaminated the area by touching buttons or holding onto railings.

Again, it’s important to avoid touching buttons with your hands. Your hands may touch your face or rub your eyes, which can allow the virus into your body. If you see a crowded elevator that won’t allow for social distancing, it’s better to take the next one or the stairs

Although you’re used to your whole condo building being your home, be cautious during this time. Learn about your condo building’s initiatives to protect its residents by emailing or calling management. For yourself, assume that everything outside of your condo unit is infected with Coronavirus so that you’ll take the necessary precautions.

The post How to Protect Yourself from COVID-19 if You Live in a Condominium first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.