From its long-term stability to its relatively steady price appreciation, the Toronto condo market is a great place to invest. According to the most recent statistics, this city is also growing faster than any other in North America—which means rentals will be in high demand for the foreseeable future. If you’re ready to invest, the question remains: are you better off opting for a pre-construction opportunity or a resale one?

If you’re wondering which type of condo is right for your investment dollars, here’s what you should know…

Pre-Construction Pros & Cons

Let’s start with pre-construction. There are significant pros and cons associated with this in-demand property type. On the upside, you’re buying an asset that starts to work for you as soon as you purchase it. Put simply, you’re paying today’s prices for a unit that buyers will be happy to pay tomorrow’s rent for (when your suite is finished, of course).

Brand new condos are also highly customizable, offering you more control over your investment. Whether you plan to move in yourself or start renting out your space as soon as possible, it can be liberating to choose your floor plan, finishes, and appliances. These units are also relatively passive investments, which means you can take a hands-off approach while your condo is being built.

Rounding out the pros, pre-construction condos come with more flexible deposit structures. Your payments will be broken into installments—which means you have more time to save.

Of course, there are some risks associated with buying brand new, too. First of all, it’s very likely that you’ll encounter construction delays. Some are considered reasonable, some aren’t (in which case you may be entitled to compensation). The point is, planning for the future can be tricky.

Another downside is, neither you nor a prospective tenant can move into your pre-construction unit right away. In fact, you can expect it to take several years before you truly own your condo. That said, buyers should be aware of the interim occupancy period, during which you can safely occupy a unit, but you don’t officially own it (this final step occurs when the building is registered).

Resale Condo Pros & Cons

One of the biggest advantages of buying a resale unit is the fact that what you see is what you get. For many buyers, there’s a sense of security in that. You’ll also have the opportunity to move in—or start renting your place out—right away.

In addition, getting a mortgage for a resale unit can be easier—given that you’ll be subject to current interest rates, and you’ll also know what your financial situation looks like today. Speaking of money, you can expect to pay a smaller deposit than you would for a pre-con unit (though it’s all due at once).

Another benefit that often goes unnoted is that the price for a resale condo won’t be fixed the way it would for a brand new unit. That means you have the opportunity to negotiate for a lower price.

There are also a few potential downsides of investing in resale. One thing to be aware of is, older buildings often have higher condo fees—though they don’t always. You may also have to invest in improvements for an older condo, including aesthetic updates and greater energy efficiency.

Which Property Type is Better?

It’s an impossible question to answer. The truth is, factors like location, being on a transit line, and having desirable features often trump the question of old vs. new.

It’s also worth noting that different buyers and tenants have their preferences. Are you a sucker for cutting-edge architecture and modern amenities, or a little bit of heritage charm in a well-established building? What about the tenant you hope to attract?

Fortunately, an agent who knows the landscape will be able to help you find the ideal unit to suit your needs. They’ll also be familiar with which developers are most reputable—and have the experience to spot red flags. Are you ready to start your buying journey?

Ready to purchase your ideal condo? I have the expertise to find it—get in touch to learn how I can help today.