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Why It’s Great to Get a New Build Condo
We’ve already discussed New Build Homes – today it’s time to talk about New Build Condos! Once again, like new build homes, a new build condo is just that: a newly-built condo. The condo market in an expanding region is divided into new build/pre-construction condos, and resale condos.
Resale condos are, of course, ones that are already built, with current owners who are putting them on the market. New build and pre-construction condos are brand new and freshly open to the market. They are part of a larger condominium property that has either recently been built, or is in the process of being constructed by a development firm.
Purchasing a new build condo means that you will be the first person owning and/or living in that specific condo unit; it also means that the seller is the condo developer as opposed to another owner.
New build condos have a great number of benefits, as well as notable differences from resale condos that potential buyers/investors would do well to be aware of. First, let’s look at that distinction: ‘buyers’ versus investors.
Buying, Investing, or Both
If you’re looking into new build condos, it’s likely you fall into one of two camps. Perhaps you’re a buyer, who’s looking to purchase the condo unit as a new home; you plan to live in the condo once it’s completed.
Perhaps you’re purely an investor: you want to purchase the condo unit not to live in it, but to either rent it out to tenants, put it back on the market at a strategic time (‘flip it’), or both.
Even if you do intend to live in your new build condo, though, you should still look at it as an investment: unlike renting, your money is going towards a stake in the real estate market that will appreciate over time.
Real estate properties naturally grow in value over time, even more so in flourishing markets like Kitchener-Waterloo.
Things to Keep in Mind
It may seem less predictable to purchase a new build or pre-construction condo, as opposed to a resale unit. With a resale condo, you can tour the building and the specific unit, and you can learn about the building’s history, including factors like the current condo board.
New build condos involve more speculation, which is why it’s important to know how to analyze the available information. Knowing the area a new condo is being built, including things like prices of existing condo units and nearby amenities, is incredibly helpful.
Looking into the developer’s track record is important, too. You should also familiarize yourself with unit and building plans and specifications before moving forward with an investment. Asking questions of the developer is key, but you should keep in mind that their end goal is securing you as a buyer.
Having an accredited Realtor on your side, asking questions for you and knowing what to look for, ensures all of your bases are covered and your needs are represented. Let’s look at a few of the ways new build condos can surpass resale units in value.
What Makes New Build Condos Better?
There are several considerable benefits to going for a new build or pre-construction condo. We’ll be zeroing in on Kitchener-Waterloo for this, but remember that the underlying principles will apply to any similar region. We mentioned that condo development is flourishing in Kitchener-Waterloo.
Developers see the incredibly active, attractive current state of Kitchener-Waterloo real estate, as well as the overall region’s long-term viability. The tech sector is not going away any time soon, and Kitchener-Waterloo’s increasingly becoming synonymous with technological innovation in Canada.
There are plans for over $1 billion in new developments by 2019, which brings us to one key benefit: developers have to do their research in terms of location, so you can be sure that the areas new condos are being erected are both stable and in high demand.
The new condos in Downtown Kitchener, for example, have it all: proximity to public transit, access to vital areas like the Tannery District, and nearby attractions. So new build condos are almost certain to offer the best locations.
A second benefit is condo fees: brand new condos typically have noticeably lower monthly condo fees than older buildings, as newer condos are in less need of repair/upkeep. New build condo units are also a blank slate: you have a say over what they’re like inside, unlike a resale unit.
Finally, the overall financial picture of a new build condo can be much more attractive. When buying a condo or a home, a 20% downpayment is what you should expect to have to pay up front.
If you choose to go the route of a pre-construction condo, though, many developers will offer alternative arrangements. This typically means regular instalments up to one final payment on the date of occupancy/possession. This makes buying a condo in a great location much more realistic, as you won’t need all of the money up front.
That way you can get the best bang for your buck, and acquire a lucrative investment at a potentially lower price than a comparable resale unit.
There are many factors that combine to make investing in real estate such a great idea. These include growth, stability, and tangibility. Real estate can be expected to have steady, predictable growth, particularly in a stable nation like Canada.
While the specific percentage growth in a property’s value can fluctuate, a property will almost certainly experience notable appreciation over time (again, especially in Kitchener-Waterloo). This makes real estate investments effective and safe. But one of the factors that most sets real estate apart from other investments is the fact that it is real: there is a tangible element to the investment, in the form of a property (whether or not that includes land).
New build condos, of course, somewhat challenge this principle of tangibility. Yes, you are paying for a specific unit or property in a specific place, but depending on when you commit as an investor, it may remain a theoretical unit or property, to be completed in the future.
How does this affect the overall value of the investment? Well, let’s take a look, keeping in mind the specific climate of Kitchener-Waterloo condo culture, as well as the broader situation in Southern Ontario.
Kitchener-Waterloo has a high number of condo units, and that number is growing each year. Demand is incredibly high for condo units, too – particularly in the ascendant tech-related areas (Uptown Waterloo, the environs of Waterloo’s universities, and Downtown Kitchener).
Indeed, even though new condos are continuing to open, it’s barely enough to keep up with demand. That’s a great sign for investors, particularly for investors in new build condos. So even though your new build condo unit may not yet have a track record – even if it hasn’t been completed yet – you can still be certain that there will be a sizable market for it, whether you’re choosing to rent it out or resell it.
Many new condo developments sell out before they are completed, and even once they’re finished, the demand is not going away any time soon.
The new condominiums in Kitchener-Waterloo are both an incredible sign of region’s progress, and an exciting opportunity for investors. Over the next few years, the skyline of Downtown Kitchener will be populated by some of the most innovative condo developments the city’s seen: everything from brand new, modern, cutting edge buildings, to repurposed and reimagined historical ones.
Whether you’re just starting out and have some money you’d like to see grow, or you’re already a seasoned investor, getting into real estate can be highly lucrative – if you’re willing to put in the work.
WRX Property Group truly believes in Kitchener-Waterloo, and if you’re looking to take advantage of the opportunities provided by new build condos (or real estate investments in general) we’re confident our expertise could ensure the best possible outcome for you.
Whether you’re interested in buying a new build condo in Kitchener-Waterloo, or you’d just like to know more, please don’t hesitate to contact us. We’re happy to help, however we can – no strings attached.
Written by Will Kummer