The obvious savings in the pre-construction market comes from buying a condo unit in a development that’s not built yet. But there’s so much more. When you buy a condo unit in the pre-construction phase you have more advantages including:

• First pricing, paying for the first and lowest price
• First appreciation, appreciation right from the beginning
• You choose units based on a first come first serve basis
• You get to choose the layout/floor plan, floor level and views that best fits your needs.

For investment purposes, choosing the best unit for you will maximize your return when you’re renting out your unit and when you ultimately sell it. In pre-construction, you get the lowest price available which means there’s no room for costly bidding wars. A common misconception about purchasing a pre-construction condo unit is that you won’t see a return right away, but this couldn’t be more wrong! You get the highest capital appreciation and price growth directly after finalizing your purchase. If you’ve invested in an up-and-coming neighbourhood, you are directly investing in an area where jobs will be created and people will be coming to live — which in turn, will generate more demand for the area.

Although you can still buy a resale condo and rent it out, resale condos don’t appreciate in value as much as pre-construction units and this is largely due to people wanting new as oppose to used, people will pay more for new, since they want modern finishes, the latest features and amenities, also the additional fees that come with managing an older home/unit. Additionally, maintenance fees are also higher with resale units because of the repairs that will be needed throughout the aging building.

Once the pre-construction condo unit is built and ready to lease it out, it will get more demand and higher rent compare to comparable resale rental units - like many other things brand new is always worth more than used-old.

Another advantage of purchasing a pre-construction unit is that you are buying a condo that will be paid back with future rental prices. When you buy a unit in resale, you’ll rent it out right away, which means that you’ll be covering your monthly carrying costs with today’s rental prices. In pre-construction, you pay today’s purchase market price, but you'll pay it back with future rental market prices. Over the past ten years, rental rates have risen at an average annual rate of 4% and we expect that trend to continue. So while you’ve bought a unit for today’s prices you can charge rent based on the market 6-10 years from now, further increasing your positive cash flow.