Vancouver presale condos
Are they a good buy?
I will discuss 5 positives and 5 negatives that you should consider before purchasing a presale condo in vancouver.
First lets talk about the Positives
- Good Rate of return on deposit if condos go up in value. Think about it, your only investment is the deposit for the purchase of the presale. What happens when the property goes up in value? Say it went up 100k and your deposit was only 50k. You essentially doubled your investment. Thats an awesome rate of return.
- You are buying brand new - Everyone likes buying brand new, in the newest and hottest new neighborhoods.
- It has a warranty - all presale condos have 2-5-10 warranty, so you can rest assured that any repairs will be taken care of for the next ten years.
- No PPT - Now thats an incentive. You can qualify for this exemption if its is going to be your primary residence and the purchase price is under $750k
- You may assign it the contract for profit - Since you are holding this investment for about 2-3 years, that this investment has gone up in value. Many investors cash out if they see a gain a big gain. Gains are treated as business income though.
Now lets talk about the Negatives
- Bump in price after sale. Their was a story recently in new Westminster, of a developer asking for more money to continue on a struggling project. One has asked for as much as an extra 15%. Unless stated in the contract, their is nothing stopping the developer for demanding more money.
- Return of deposit - if developer does not want to complete the project, they have the option of returning your deposit.
- Floor plans can be altered from the time of purchase till completion - this actually happened to a client of mine who originally purchased a 2 bedroom with 2 bathrooms. The developer wanted to change the floorpan to 2 bedroom with 1 bath.
- Prices Going Down? - 2 years is a long time, and anything can happen. The market can go up but it can also go down. I have seen presale buyers selling for a loss back in 2007 and 2008.
- Purchase price - Are they a good deal? Most assume they are a good deal. But the fact is the developer is future pricing all the homes. They are pricing out homes on what they think homes will value in 2 to 3 years time.
So there you have it the 5 Positive and 5 Negatives you should know about if you are buying a presale in vancouver. If you have any questions please reach out to me. If you are interested in purchasing a presale I can get you vip access on some popular projects across the lowermainland.