Investing In Calgary Condos: Pre-Construction Vs Resale

Pre-construction

Benefits

• Get a good price. Pre-construction condos are often very well priced compared to resale condos.
• Increased value. There will be an increased market value once other condos are built. If you buy your condo during the construction phase, it will have a lower price than other condos that are sold at market value once they’re complete. This will lead to an immediate increase in the value of your condo.
• Customization. If you purchase a condo while it is still under construction, you can have a say in the floor plan and any finishings. Having the freedom to choose flooring and fixtures can help make your condo truly feel like your home without having to pay for expensive renovations further down the line. This customization can also help you save money if you choose the more affordable home finishings. This is a good way to keep costs minimal if you don’t want to make the home personal to your tastes, especially if you plan on renting out the property.

Risks

• Potential delays. There may be delays that keep the condo from being ready on time. If you’re planning on moving into the condo, this can make it difficult to navigate when you need to sell and vacate your current residence. If you plan to rent out your new condo, it can impact how soon you can start collecting rent.
• You need to wait to sell. Since your condo isn’t built yet, you will need to wait to sell the property, even if you have interested buyers. If you want to make a profit, your best option is to buy the condo in the pre-construction stage and then sell it after it is completed and the value has risen, although this may take several years. You can also sell the condo contract, but it will have to be sold the same way you bought it without any new addendums or terms.
• There’s time for changes. When you purchase a pre-construction condo, it can sometimes take years to reach completion. It can be difficult to predict what will happen during that time, including  any job instability for the buyer, if any new tax or mortgage rules are created, what the neighbourhood will look like by the time your condo is completed, what market fluctuations there will be, and more.

Resale

Benefits

• Quick move in time. Since resale condos are already built, they are ready to move into right away so you don’t have to wait.
• Low interest rates. While you will likely need a mortgage to buy a resale condo, mortgage rates in Calgary are incredibly low right now, making it an ideal time to buy.
• Simple mortgage. Getting a mortgage on a resale condo is more simple than a pre-construction condo since a resale condo is a faster mortgage process. When you apply for a mortgage for a resale condo, you know the current interest rates, your current income, and what your monthly payments will be. You can also have your appraisal completed quickly.
• Great liquidity. Once you own a resale condo, you can do with it as you please. If you are investing in a condo to rent out, resale is likely the best option for you.

Risks

• No fixed prices. It is possible that you will end up in a bidding war for a condo, especially with the current lack of available homes and condos for sale in Calgary. 
• Condos may not be new. When you buy resale, the condo may have been lived in for a while and/or may not be exactly what you’re looking for. If you want to do renovations to make the condo feel more like home or if there are any parts of the condo you feel need updating, you will need to account for those renovations in your budget.

Purchase A Condo With A Calgary Realtor®

When trying to break into the Calgary Real Estate market, every person can benefit from the knowledge and guidance of an experienced Calgary Realtor®. If you need help deciding if a pre-construction condo or a resale condo is the right investment for you, consult with one of the experienced Calgary Realtors® on the Mel Star team. The Mel Star team has the experience to negotiate and would be happy to guide and educate you on all the nuances related to buying or selling a condo in Calgary. To contact the Mel Star team, either call 1-403-861-9944 or fill out the online contact form. To see listings for new condos in Calgary, click here.