Buying real estate is always a good investment whether it’s as your own home or an investment property to generate income. It’s a fabulous means to diversify an investment or retirement portfolio.
New condominiums, new townhomes and new single detached homes are an excellent long-term investment for the future while appealing to a diverse range of people. Everyone has to live somewhere!
Location is always key so you’ll find new home communities, whether condo or detached, in emerging markets and prime areas with amenities close by. This appeals to investors as it reduces risk and maximizes long-term appreciation. When you choose a hot location near transit, shopping and business centers, you can’t go wrong and are certain to attract tenants as well as buyers when it comes time to sell. Consider educational and medical staff, students, and professionals on contract as potential tenants who may need to access the downtown core, nearby schools or hospitals for work.
New properties tend to appreciate faster while also drawing in retail services and amenities to serve the growing community. The result is greater demand for homes in the area and an increase in property values.
Builders generally require a small initial deposit to secure a property. Your Agreement of Purchase and Sale will outline a further deposit schedule, while the property is under construction and occupancy is offered. This could be months or a year or more in the future so investment funds can be applied over time. If you are buying at pre-construction prices, which are lower, you can enjoy some savings as once a project gains popularity and construction begins, prices rise.
A new home includes a Tarion Warranty. This coverage includes protection for deposits, protection against financial loss for contract homes, compensation for delays in closing or occupancy, protection against unauthorized substitutions, one and two-year warranties for certain defects in work and materials; and a seven-year warranty for major structural defects. There is also coverage for the common areas of a condominium. See all the details at www.tarion.com In addition, new appliances will also have a manufacturer’s warranty.
Many of today’s homebuilders are practicing green building with environmentally friendly methods and materials. This will lower energy costs for renters while also increasing the property’s resale value.
With all of the renovating underway today, can you be sure a resale property has been renovated according to the municipality’s building code? Or is a building code for renos from decades past, sufficient for your needs today?
A resale home may need renovation, updating or repairs. Older homes may not accommodate current lifestyle needs. A smaller kitchen, old carpeting, limited closet spaces and shower-only baths and stairs(!) are big turnoffs for many real estate investors (and their future renters). Today’s open-concept designs offer brighter, spacious homes and condos with greater versatility.
You may not want to invest in areas where employment, shopping and important services and lifestyle needs are a long commute away as this can reduce prospective tenants. On the other hand, if there is demand for affordable accommodations and your property is suitable, your costs are covered and you are making a return, this could be a good investment for both of you!