Over the past decade, the city of Toronto has experienced a rise in upscale condominium developments. If you are a small investor, you should invest in a pre-construction condominium with the assistance of a real estate professional. The return on investment is high and the risks involved are less than in many other investments.
In this blog post, we will discuss the reasons why investing in a condo is considered a good investment for small investors.
- Cost Effective: Condominiums are cheaper than detached and semi-detached homes in Toronto. For small investors, owning a house would be an uphill task, primarily because of the costs involved. Buying a condo, on the other hand, require less financial resources, so it is considered a smart investment for small investors.
- Maintenance Costs: A house requires maintenance all year round in order to keep its property value intact. Cutting de grass, shoveling snow, and cleaning the roof, are just some of the things you have to take care of in a house. However, the costs involved in the maintenance of a condo are way lower. When investing in a condo, look for a builder who manages their property with a high degree of professionalism and diligence. This way you won’t have to worry about unexpected maintenance costs.
- Payment Structure: The payment structure of pre-construction condos in Toronto is favourable for small investors. The down payment for pre-construction condos can be spread over a period of five years. This means that you do not have to pay a huge amount of money up front to acquire the property. With the help of a certified broker, you can also get discounts. Usually, the down payment for pre-construction condos is about 10%-12% of the total price, depending on the property type and its location. This favourable and flexible payment structure makes condos a good option to invest.
- Leverage: When you decide to buy a condo, you need to put down close to 15-20% of the price of the property as down payment. Purchasers generally loan out the rest. Let’s say a condo unit costs $500,000 and you put down $100,000. If the worth of the property goes up by 5% every year, the net worth of your purchase will go up from $500,000 to $525,000 in only 12 months. This means the leverage of the investment is high, giving small investors a great profit.
If you are looking for a sound plan for your future, investing in a pre-construction condo can prove to be the ideal choice. As we have discussed, the advantages of this investment are greater than the benefits you would get by investing in detached, semi-detached and single-family houses. If you are a small investor in Toronto, choose to invest in a pre-construction condo.