If you’ve been scouting the real estate market for pre-construction investment opportunities, your eyes have probably been fixated on the Greater Toronto Area (GTA). But here’s the twist: some of the most exciting, profitable investments are happening outside the GTA. With mortgage interest rates being at record-high, many investors like you are considering investing in pre-construction projects since you aren’t required to get a mortgage to pay for the unit until it’s time to move in.
Many projects outside the GTA feature flexible deposit structures, enabling you to spread a 10-20% deposit over a timeframe of 2-5 years. These deposits can be financed through various means, such as personal funds, gifts from family, or personal loans.
While the GTA garners much of the spotlight in real estate ads, there are exceptional investment opportunities in areas like Hamilton, Barrie, St. Catherines, and Pickering. For those on a tighter budget, Alberta and Manitoba present appealing options, with pre-construction properties starting at just $250,000.
Here are 5 reasons why you should invest in pre-construction projects outside GTA:
1. Lower Costs
Real estate in the GTA isn’t cheap. The average cost of a pre-construction condo in the GTA starts at $600,000. But if you take a short drive to St. Catherines, you can get a well-sized condo for only $450,000. The cost-saving potential is significant, which means you could either save money or invest in multiple properties for the price of one in the GTA.
2. Rental Guarantees
Several developers operating outside the GTA offer rental guarantees. In layman’s terms, this means the developer will rent out your unit for a set period, usually enough to make a dent in your mortgage payments. It’s an assurance that you won’t have a vacant property eating into your finances, making the investment much more secure.
3. Population Shift
It’s not just developers who are eyeing regions outside the GTA; people are actively moving as well. Whether it’s due to remote work flexibility or the high cost of living in the GTA, people are relocating, and even Alberta is becoming a hotspot. This shift ensures a constant demand for your pre-construction property, not to mention the various builder incentives and amenities that are popping up to attract potential buyers.
4. Favorable Terms and Incentives
Many projects outside the GTA come with attractive terms like a no charge assignment policy and no development charges. Some even throw in free parking—a feature that could set you back anywhere from $30,000 to $80,000 in the GTA. Some other popular incentives include the option to pick interior and exterior finishes, carpet vs hardwood, and free internet for a year.
5. Extended Deposit Structures
Most GTA pre-construction projects require a 20% deposit to be paid within 2-3 years. However, many developments outside the GTA have more lenient requirements, like a 10-15% deposit spread over 3-5 years. You can even pool in resources and purchase as friends. This eases your immediate financial burden and makes entry into the real estate market more accessible.
Few More Advantages
- Lower Competition: The rush is generally towards the GTA, meaning you’re likely to face less competition in bidding wars outside this area.
- Community Development: With the rise in population, new community centers, parks, and other amenities are under development, adding value to your investment.
- Higher Returns in the Long Run: As these areas develop, the potential for property appreciation is significant, promising higher returns on your investment in the future.
As a pre-construction realtor in Brampton, I provide my clients exclusive first access to floor plans and the option to reserve their preferred unit. Contact me to discover more about these pre-construction investment opportunities.