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7 Tips on Pre-Construction Condo Investments

There are a variety of reasons why our clients choose to invest in Eighty Seven Park. Some of our clients select our condos for the primary purpose of using it as a place of residence. Other clients have the intention of acquiring a condo at Eighty Seven Park for rental purposes, where the property is leased out to tenants and provides the owner with a reliable stream of income.

In other cases, your condo can serve you very well as an asset that you can flip later on and enjoy a significant return on your initial investment.

Regardless of what your intentions are with your Eighty-Seven Park condo, it is important to take into consideration the following seven tips so that you get good value for your money and meet your financial goals with regard to the property you want to acquire.

Carry out your due diligence on the developer

Investigating the reputation of the developer of your condo is equally important when you’re planning to purchase a resale unit, but this due diligence is even more important if you’re planning on investing in anEighty Seven Park condo. When you’re investing in a pre-construction project, a large component of the risks that your investment faces are dependent on the reputation of the developer.

Find out if the developer’s projects face unreasonable delays and if they have any incomplete projects that were abandoned. It is very normal for delays to occur when developing complicated projects like Eighty Seven Park. What matters most is how the developer communicates and handles these delays.

Take some time to visit projects that the developer completed in the past 5 or more years and if those structures have stood the test of time. If these structures are still of good quality then it is a good commendation on the developer’s work.

Use the rescinding period to your advantage

Investing in a pre-construction project like Eighty Seven Park gives you the advantage of having a number of days as a grace period where you can rescind your decision to purchase the condo and still get a full rebate on your deposit without any penalty.

Within this period, the price you agreed on with the developer will be reserved including all agreed on incentives and your property cannot be sold to another buyer. You should use this duration to go through the fine print of your purchase agreement with your lawyer and ascertain that there are no gotchas that can come back to bite you later.

Work with an experienced realtor

The process of buying a condo is very different from that one of buying a resale unit. These transactions contain more clauses and conditions than your standard resale home purchase. Now, before committing to an agreement that might be detrimental to you financially, it is important that you work with the realtor who has proven experience in pre-construction transactions. Engaging the services of a lawyer with experience in pre-construction condos will help you to understand the fine print and even suggest amendments to clauses in the purchase agreement that are detrimental to you.

Expect and plan around construction delays

When investing in a pre-construction project, you should expect and plan around delays to the date of occupancy. The completion dates that the developer provides you are best-case-scenario approximations that can suffer from unexpected delays. Causes of such delays can include bad weather conditions, labor strikes, and even changes in municipal legislation.

A reasonable timeline to add that considers delays is around three to six months from the provided date of the completion.

The homeowners Association

Pre-construction condominiums like Eighty Seven Park share a lot of communal facilities that have to be managed and maintained communally. This management is carried out by the homeowners association that maintains shared facilities like the exterior structure of the condo, amenities, landscape and shared utilities. They will charge a regular fee to accommodate these services. The HOA will also have rules and regulations that all condo owners are expected to abide by. Before investing in a condo, make sure that you can live with the rules and regulations and the fees as stipulated by the HOA agreements.

Budget for closing costs

Just like in any real estate transaction, you will incur some closing costs before finalizing your deal to acquire a condo at Eighty Seven Park. Some of these fees include development fees and municipal levies that are charged by the municipal on the developer and which the developer will pass on to the new homeowner. These closing costs can add approximately 1.5 to 5 percent of your purchase price.

Take advantage of the interim occupancy if offered

The developer can offer interim occupancy, which is a situation where you are allowed to move into your Eighty-Seven Park before fully taking ownership. So you haven’t actually fully closed on your purchase transaction. This arrangement has the benefit that if you’re paying a mortgage to purchase your condo then instead of renting an apartment while waiting for the completion of the condo you can move into your condo at the monthly payments you make are towards ownership of your condo and not on rent.

The interim occupancy can last up to even six months during which owners will be moving progressively into the complex. The process of moving in is usually staggered to avoid the impracticality of everyone trying to move in on the same date.

Before taking advantage of the interim occupancy, make sure that you’re very clear on the interim occupancy fees and how they measure up against renting an apartment.

In summary, those have been some of our tips to consider before investing in a pre-construction condo.