In today’s sizzling Canadian housing market, the concept of “choice” seems like a luxury reserved for the elite. Skyrocketing prices and historically high mortgage rates have many potential homebuyers questioning their options. But what if there’s a middle ground that offers both security and opportunity? Enter the world of pre-sale units.
What’s the Risk?
If you’re not already pondering the risks, it’s time to start. While pre-sale units aren’t inherently risky, they’re not entirely risk-free either. Confused? Allow us to demystify.
What is a pre-sale unit?
A pre-sale unit is a property you commit to before its construction is complete. This commitment period can range from two years up to seven years, offering you a unique advantage: the earlier you invest, the less you’ll likely pay—much like snagging an early-bird flight ticket.
A Payment Plan Tailored for You
Unlike traditional property purchases, pre-sale units come with a unique payment schedule. Your mortgage payments kick in only when you receive your keys. Initially, you’ll make a deposit that can be anywhere from 15% – 20% of the sale price in scheduled installments that can spread across months and even years. Your money is held in a trust with the lawyers in their trust account and cannot be touched by the developer until the project is complete, safeguarding your investment against any project delays or cancellations.
An example of this would be, paying 15% of the purchase price in 3 installments of 5% spread 6 months apart. The rest would only be due on Completion.
Pre-sale units are guaranteed high quality units.
Pre-sale units are synonymous with quality. Designed to meet future housing demands, units often come equipped with modern amenities and high-end features. Whether you’re looking to sell or rent, you’re investing in a premium property that promises excellent returns.
Mitigating Risks: A Buyer’s Guide
While pre-sale units offer a safer investment route, due diligence is crucial. Stick to reputable developers and focus on well-connected locations to maximize your long-term gains.
Can You Lose Money?
The risks associated with pre-sale units are similar to any real estate investment. Market fluctuations are unpredictable, but given Canada’s current housing crisis and increasing immigration rates, it’s safe to assume that property values will continue to rise.
The Future is Pre-Sale
With the growing demand for housing, pre-sale units are becoming the new norm. Reputed developers are focusing more on these high-density, condo-style units, making pre-sale not just a lucrative investment but also a secure plan for your future home.