I really enjoy reading your blog and getting informed about the Toronto Real Estate Market!
My husband and I have our eyes on this development – 169 Jones at Leslieville.
I have done quite a bit of research, but I am still hesitant about buying a pre-construction development.
Especially one that hasn’t started in construction yet.
I was wondering maybe you have insight thoughts, or tips we should be looking out for!
Nice to hear from you!
I like the idea of 169 Jones, and the location as well.
But as you know from reading my blog, I don’t like anything about pre-construction.
I don’t care who the developer is, or what the project is – the risks still apply.
You’re still going to have material changes to the project.
You’re still going to have defects in workmanship, and have to chase it through TARION.
You’ll have delays in construction, and occupancy. There’s always a risk that the project is cancelled, before construction, or during. Google “King’s Club Condo” and see what a developer can do with “your” investment.
You’ll have the occupancy period, which is one of the biggest reasons why I don’t sell pre-construction. You could “occupy” this condo anywhere from 6 to 24 months, meaning you pay a fee, for a unit you’re purported to “own.”
Then there’s the obscene closing costs, aka “adjustments” – the developer could hit you with $10,000 or $75,000. You’d better have the best downtown lawyer working on the file.
And that’s all the risk before even setting foot in the sales centre, for a property not built.
So what if the market crashes? What if life changes? You’ve bought a piece of paper – not an asset. Your hands are tied, and you can’t sell it. Sure, the sales people will tell you that “you can assign it,” but that never works.
If you’re looking to move into this place in 3-4 years, and you own a home right now, then it lessens the blow. You can move into the unit during occupancy (having sold your current residence) and simply pay the fees.
But if that’s not the plan, then I wouldn’t even consider it.
I don’t like intangible, invisible, immovable assets as “investments,” especially with unknown fees.