As an East Vancouver resident, chances are you’ve seen ads announcing pre-construction condos for sale. The terms can be extremely enticing—minimal down payment, rock bottom prices, and they’re situated in the heart of the metro. But what does pre-construction mean? Get to know more about it so you’ll know if it’s worth investing in this type of property.
What is a pre-construction condo?
Pre-construction or pre-sale condos are properties sold before the completion of the project, either while it’s still in the planning stages or under construction. Selling condo units before they are completed allows developers to finance their project. In turn, buyers get the chance to purchase the property at a much cheaper price. Despite the attractiveness of such an offer, there are considerations to be made, and it pays to know the pros and cons of the process.
Pro – Low opening prices and flexible payment schemes
Because they have nothing concrete to show aside from the plans, real estate developers often offer pre-construction properties 30 to 50 percent lower than actual existing units. This is designed to attract the most number of interested buyers. For further enticement, developers are even willing to package already low prices with promos, discounts, and flexible payment schemes.
Con – It’s possible for the property to be delayed, changed, and end up partially complete
If a developer ventures into pre-construction selling, it can be because he is having trouble financing the project. If he can’t scrounge up the finances, the finished product may end up not being what was promised.
Pro – Immense ROI potential
More often than not, a pre-construction property will appreciate in value once the project is completed. This is the most likely scenario if the property is strategically located near central business districts, commercial establishments, and educational institutions. In the event that you have to move and sell your property in the future, you’ll be doing so at a profit.
Con – Buyer can’t back out if market fails
If Vancouver real estate prices drop, the value of the completed property could be lower than its presale price. Even then, the buyer will still be required to complete his payments, as doing otherwise could spell legal trouble.
If you want to learn more if pre-construction condos for sale in East Vancouver are a good investment for you, consult with a real estate agent with a solid portfolio and a background in such properties, such as the ones at Real East Van.
Why Invest in Pre-Construction Condos, RealEstateInvestmentCoach.ca
6 mistakes new condo investors make, MoneySense.ca