You're been Pre Approved for $500,000 - Which Pre-Construction Condo Do you choose?
Today we're going to compare 3 different Pre-Construction Condo Developments in Toronto.
Let's get a few main things out of the way.
These 3 Developments - ARE NOT in the same area.
These 3 Developments - ARE NOT priced the same price per square foot.
These 3 Developments - ARE NOT offering the same features or incentives.
So, WHY I AM COMPARING THESE 3 DEVELOPMENTS?
What could they possibly have in common?
NOTHING ACTUALLY!
While some buyers feel the need to shop and compare floor plans, prices or amenities and features.
I'm actually going show you a different perspective when shopping for a pre-construction condo.
K, Wait! So, what are we looking at?
These 3 developments - ARE the best deals in terms of pricing in their respectful neighbourhoods.
Any project launching in the same neighbourhood will be selling for more than what these condos are selling for in their respectful areas. (Don't even, for one second, think that the next development to follow will come in with less price per square foot, or the same price. It's never happened, and it will never happen. No matter what anyone tells you!)
These 3 Developments - ARE offering you to put down between 10-15% deposit towards the down payment in the first year!
Which is a great thing to consider!
Listen, do you need the full 20% down payment before you buy? Absolutely NOT.
Can you make the first deposit? Can you make the second deposit? or in the months in between save up for more?
Sometimes you don't have the full 20%, and honestly, if you did, i would probably be asking why you're not buying resale.
So if you think your strategy is to buy when you have your full 20% down payment, you may always be falling behind every time you caught up .
Those of you who do not have a full 20% deposit on a property, but have some money saved up, and have a job in which you know you will be working or at least getting a paycheque for the next 4-5 years and hopefully forever after that, and can save up some more money to put towards your deposit... then this strategy is for you!
These 3 developments - ARE currently selling in PreConstruction and launched at the same time.
THIS IS THE MOST IMPORTANT FEATURE TO LOOK AT.
Why?
Pretend you are a buyer looking for resale property.
You tell me your budget is $500k.
I would normally tell you lets try to find something in less than 3 months. Because each quarter there is a change in market value, and in Toronto, Condos have been consistency going up and up.
So, in this quarter if your price range is $500k and you don't find anything, then each quarter you will slowly see a change in property prices that we go see.
Now, each quarter you will notice 1 of 2 things. I starting taking you to that 1 bed + Den condo that you're looking for but every time i tell you the price, it's higher than last months price, or, we continue to see that 1 bed+ den condo that you're looking for in the price range that you're looking in, but, the units are getting smaller and smaller. We went from a 650 square foot condo, to a 600 square foot condo.
So essentially, every month you don't buy, you're literally buying that 1 Bedroom, or 1 Bed+Den or 2 Bedroom Condo for a higher price and perhaps a smaller size.
This is the exact same thing when shopping for pre-construction condos.
Say you are looking at Scout Condos and thought those prices are to high for the area. You then decide to pass and wait for the Stockyards Condos that will be launching soon in the same area.
But you never really know when soon is!
Remember, I said every quarter there is a new price adjustment, the new prices will be a reflection of the market increase.
So if you didn't buy that 1 Bedroom at Scout Condos for $430k, and Stockyards Condos launches in November, IF IT EVEN LAUNCHES IN NOVEMBER, then you are now looking at a potential $10,000-$15,000 increase for the same 1 Bedroom suite or the same prices but smaller units.
By the time Stockyards Condos launches and you want to sit and compare it to Scout Condos, then you will have already been too late. Either the floor plan you were looking at is no longer available or ever worse, Scout Condos increased their prices to reflect the market change.
Do you get it now? Is this making sense?
With a little bit of a different perspective, we may have gained some insight, and now we can potentially see things a little differently.
Or perhaps, have more confidence when purchasing.
So now, I leave you with some details to look at for each project.
At the end you will read my summary on which i would choose.
#1 | PROJECT: 543 RICHMOND
DEVELOPER: Pemberton
LOCATION: Richmond + Portland
SUITE TYPE SIZE RANGE PRICING FROM
Studio 370 - 435 sf $499,990 - $521,990
1 Bedroom 510 - 525 sf $588,990 - $605,990
1 Bed+Den 520 - 700 sf $651,990 - $748,990
2 Bedroom 635 - 880 sf $713,990 - $893,990
2 Bed+Den 805 - 855 sf $838,990 - $958,990
3 Bedroom 890 - 1,015 sf $877,990 - $1,114,990
3 Bed+Den 1,045 sf $1,070,990
PARKING: $79,000, not included in purchase price.
DEPOSIT STRUCTURE: ONLY 10% DOWN The First year:
$5,000 on Signing, Balance to 5% in 30 Days
5% in 120 Days
5% in 425 Days
5% in 540 Days
5% On Occupancy
Total 25%
ESTIMATED OCCUPANCY: MAY 2022
#2 | PROJECT: SCOUT Condos
DEVELOPER: Graywood
LOCATION: 1779 St. Clair West | Weston Pallam Park | Toronto
SUITE TYPE SIZE RANGE PRICING FROM
1 Bedroom 425 - 610 sf High $300's
1 Bed+Den 570 - 733 sf Low $400's
2 Bedroom 692 - 856 sf High $400's
2 Bed+Den 888 - 1,241 sf Mid $600's
Townhome 1,130 - 1,206 sf Low $8800's
PARKING: $40,000, not included in Purchase price.
DEPOSIT STRUCTURE: 15% DOWN The First year:
$5,000 on Signing, Balance to 5% in 30 Days
5% in 90 Days
5% in 270 Days
5% in 540 Days
Total 20%
ESTIMATED OCCUPANCY: MARCH 2022
#3 | PROJECT: EVERMORE
DEVELOPER: Tridel
LOCATION: 10 Eva Rd. | Etobicoke - West Village | Toronto
SUITE TYPE SIZE RANGE PRICING FROM
1 Bed+Den 672 sf Low $500's
2 Bedroom 784 - 1089 sf High $500's
3 Bedroom 988 - 1,229 sf Low $700's
PARKING: Included in Purchase price.
DEPOSIT STRUCTURE: 15% DOWN The First year:
5% on Signing
5% in 120 Days
5% in 270 Days
5% in 420 Days
Total 20%
ESTIMATED OCCUPANCY: EARLY 2022
So, HOW DO I SUM UP THESE 3 DEVELOPMENTS?
The best way for me to explain it is basically tell you what I personally take from each.
#1. 543 Richmond
It's the highest priced per square foot in terms of my 3 selections in this Blog.
BUT, because it requires a 10% deposit in the first year and requires a total of 25% down payment - is the EXACT reason why i would buy here first.
This is a very hard area to buy into. All other developments launching in this area will have between a 15%-20% structured down payment with in the first year, and will have a higher selling price per square foot. GUARANTEED!
Why the 25% down payment turns me on - because when you're purchasing pre-construction condos, in your 10 day cooling-off period, the buyer is required to provide a mortgage pre-approval letter.
And guess what?
that pre-approval letter will be for the remaining principal amount after the deposit structure.
So, basically, take the purchase price, less the 25% deposit and the remaining amount is what you need as your pre-approval.
In almost every pre-construction condo downpayment, the 20% deposit will be structured in instalments mostly with-in the first year, and some stretch it to the 2nd year.
However, if all these developments have an estimated occupancy date of 2022, that means if i buy today, October 2018, by the end of 2019 i will have finished paying my 20% down payment towards my condo. I still have another 3 more years that i can be saving for my last 5% deposit... why wouldn't I do it?
That extra 5% that you are putting down before the condo closes kinda puts you in the same pre-approval number that you would be bringing into another development that is only offering 20% down. 5% goes a long way.
Check this out, in the beginning of the Blog i gave an analogy of a buyer with a $500k pre-approval. Okay, so let's apply that here, with these 3 developments:
Scout Condos 543 Richmond Condos Evermore Condos
2 Bed | 740 sf 1 Bed+Den | 525 Sf. 2 Bedroom | 835 sf
Purchase Price Purchase Price Purchase Price
$628,000 $656,990 $625,000
20% Down payment 25% Down payment 20% Down payment
$125,600 $164,247.50 $125,000
Pre-Approval Req'd Pre-Approval Re'd Pre-Approval Req'd
$502,400 $492,742.50 $500,000
5% Structured Deposits= 5% Structured Deposits= 5% Structured Deposits=
$31,400 each $32,849.55 each $31,250.00 each
Granted, lets state the obvious, none of these are the same size or the same type. Duhh, wouldn't be writing this blog if that's what this was about.
I have a budget in mind. I am looking at the highest return on my investment. And right now, in all of Toronto, these are my 3 best options.
In the year 2022, maybe circumstances have changed. Maybe I don't want to live there, or maybe i want to live there for a year and move into a bigger place.
That's what this place will give me. I know that 543 Richmond will have the highest return and increase in value year after year compared to the other developments.
A higher return on my investment means more flexibility in terms of me moving up in the future. If this place is going to make me $250,000 by 2022, and the other places are going to make me $150,000, helllooo that's a greater return that i can be putting down on my next property to move on up to.
#2 Scout Condos -
This development is also tempting. It offers larger suite sizes for the price. I can also spend less money instead of my max budget. And maybe, just maybe, i can work in that $40,000 parking spot into my budget. It may not be downtown downtown, but its really close. I am personally a huge fan of St. Clair West. I have family that lives in this area and its always fun here. Easy to commute to downtown, or getting away from the city. Also, the TTC right-of-way Streetcar is what Queen St. wishes they could have, and it's what King St. width is capable of achieving but the Pilot Project will do... for now.
But realistically, if i know that i want to live here for quite a long time, then i would probably spend the money, buy my 2 bedroom place here and not have to worry about moving or selling or whatever it may be by 2022. Just get my place and move in.
#3 Evermore Condos-
This is a great investment area in terms of renting out my place instead of living here or who knows maybe just live there.
Realistically, its' the least expensive out of all 3 developments with the largest square footage, oh and also PARKING IS INCLUDED IN THE PURCHASE PRICE! So if i am looking for a deal, then this is the one for you.
Okay, thats enough for me! On to the next Blog!
If you have any questions, never hesitate to ask. Feel free to send me an email.