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Navigating the Real Estate Market: Pre-Construction vs. Resale

The Greater Toronto real estate market is a dynamic landscape. Whether you're a seasoned investor or just starting to dip your toes into the market, staying informed about the latest trends and options is essential. At REXIG Realty, we understand the importance of making informed decisions, which is why we're here to guide you through the choices between pre-construction and resale properties.

Pre-Construction Condos: The Potential for Profit

As experts in the Ontario real estate market, we specialize in both pre-construction and resale properties. Pre-construction condos, in particular, offer unique advantages and opportunities for investors willing to seize them.

Construction Cranes

Who Should Invest in Pre-Construction Condos?

Pre-construction condos can be an excellent choice for those who meet specific criteria:

1. 15% Down Payment: Typically having a 15% down payment available or equity in another property is beneficial when investing in pre-construction condos.

2. Long-Term Perspective: Investors should be willing to wait for the project's completion and be prepared to become landlords once the building is ready for occupancy.

3. Savings for Mortgage Qualification: The ability to save enough over three years to qualify for a mortgage is a key factor for pre-construction investors.

Is Buying Pre-Construction Cheaper?

Traditionally, pre-construction condos were often priced lower than their resale counterparts, making them an attractive option for investors. However, the landscape has evolved. Increased construction costs, rising demand, and government-imposed development charges have led to higher pre-construction prices.

While pre-construction can still offer value, it's crucial to be discerning. Some developments, often labelled as "status" condos, come with premium price tags that may not justify the investment. To ensure a good ROI, it's vital to work with a knowledgeable real estate agent who can distinguish between worthwhile opportunities and overpriced projects.

When Are Pre-Construction Condos a Good Investment?

Real estate investments, including pre-construction condos, are long-term endeavours. Identifying neighbourhoods poised for growth and where inventory remains low can yield promising opportunities. Keep in mind that pre-construction can be a lucrative investment when chosen wisely.

Pros & Cons of Investing in Pre-Construction Condos


- Customization: First owners can tailor their units to their preferences, from floor plans to interior finishes.

- Historically Affordable: Pre-construction condos have traditionally been more affordable, although this is changing.

- Deposit Structure: Pre-construction typically involves staggered deposits, spreading the financial commitment over several years.

- Potential for Equity Gain: Equity can accumulate during the holding period, potentially increasing the property's value.


- Risk of Project Completion: Investors are essentially investing in an idea, with no guarantee that the project will be completed as planned.

- High Initial Deposits: While staggered, the initial deposits can be substantial.

- HST on Completion: Investors may be subject to HST upon completion, depending on their intended use of the property.

Investing in Resale Condos: A Solid Alternative

Resale condos are existing properties and offer a different set of advantages and considerations.


Who Should Invest in Resale Condos?

Investing in resale condos is suitable for those who meet these qualifications:

1. 20%+ Down Payment: Having a down payment of 20% or more readily available is a prerequisite for resale investments.

2. Mortgage Qualification: Qualifying for a mortgage at the current market rates is essential.

3. Long-Term Commitment: Being prepared to be a landlord for an extended period is necessary for resale investments.

Condominiums in Urban City

Why Choose Resale Condos?

Resale condos can offer a quicker path to generating income, as they are move-in ready. Investors can capitalize on rental income immediately, and with rising rental rates, this can result in a steady income stream.

Pros & Cons of Investing in Resale Condos


- Immediate Income: Resale properties offer the advantage of generating rental income right away.

- Tangible Property: Investors can physically inspect the property before purchase, reducing risks associated with project completion.

- Exemption from HST/GST: Resale properties are typically exempt from HST/GST.


- Maintenance Costs: Older properties may require renovation or maintenance expenses.

- Higher Initial Down Payment: A higher down payment is required at closing compared to pre-construction.

- Missed Early-Bird Offers: Resale investors may miss out on early-bird incentives common in pre-construction.

Finding Your Investment Fit

Deciding between pre-construction and resale condos depends on your financial situation, investment goals, and risk tolerance. Our team at REXIG Realty is here to provide tailored advice and help you identify opportunities that align with your unique circumstances.

Investing in GTA's real estate market is a strategic move, and having an experienced realtor who understands the nuances of both pre-construction and resale properties can be your greatest asset. Contact us today to discuss your investment goals and embark on a journey toward maximizing your ROI in the ever-evolving real estate market.


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