Pre-construction condos vs. resale condos: the differences between the two are vast.
Whether you are a condo purchaser or an investor, knowing the advantages and disadvantages of both options is crucial. Today, as a pre-construction condo development ourselves, we here at Harbourview District are breaking down the key components of both so that you are informed ahead of making your next real estate-related decision.
What Is the Definition of a Pre-Construction Condo and a Resale Condo?
Is the condo lifestyle for you? If so, it is vital that you know the definitions of a pre-sale condo vs. a resale condo ahead of making your next real estate-related purchase or investment.
Both are what they say on the tin: a resale condo is a condo that has already been previously purchased and is now available for resale. A pre-construction (also commonly referred to as a “pre-sale”) condo refers to a condo that a buyer can purchase prior to its completion.
Depending on your financial state and/or situational needs, one option is likely a better investment property for you than the other.
The Advantages and Disadvantages of a Resale Property
When purchasing resale condos, one of the main benefits is the ability to move in immediately upon purchase. This makes resale property be considered the “safest option” when it comes to property purchases in the eyes of first-time buyers… but, as we’ll delve into, playing it safe comes at a cost!
Buying resale also comes with a great amount of flexibility. As long as it falls within your building’s regulations, you, as the unit owner, can move in, rent it out (temporarily or long-term), or resell as you please.
With this being said, however, the most common downsides of purchasing resale include:
- Little to no room for customization: When opting for a resale condo, the truth is that “what you see is what you get.” While this is good in terms of reliability of your condo’s general quality, the accompanying downside is, unless you are willing to shell out extra money for renovations, you lack the flexibility to customize your purchase.
- The requirement of an upfront down payment: For buyers who may be looking to save for their mortgage long-term or incrementally make mortgage payments, a resale property may not be the best choice for you financially. Instead, the accompanying mortgage process is to pay your down payment upfront, which results in having less time to save.
- The risk of imperfections: Whether it be a condo, townhouse, or traditional single-family home, resale properties are distinctly lived-in due to there being previous owners. Versus a pre-construction property, resale properties most often require renovations in order to modernize their look or repair damages. No “new condo glow” here!
The Advantages and Disadvantages of a Pre-Construction Property
If resale properties are the “safe and steady” option with little flexibility, then pre-construction properties act as the opposite side of the coin: ripe with opportunity but requiring a longer wait until they have been completed.
Defined as any real estate property that is being sold by a developer ahead of its completed construction, pre-construction properties (otherwise known as “pre-sale properties”) come with their own sets of challenges… and an even greater reward than resale properties have to offer.
The most referred-to of these challenges is what’s known as “the waiting game”. Because the sale of pre-construction condos is finalized ahead of the building’s completion, purchasers have to wait longer to make use of the property than they would when buying a resale. This time period can be months or even years.
After finalizing this purchase, an exception would have to be made in order for the buyer to retract their offer.
What are the benefits of buying pre-construction, however?
- A steadier type of mortgage: The earlier a pre-construction condo is bought, the greater the monetary return a purchaser can make due to general real estate market price rising over a period of time. In addition to this, a down payment will not have to be provided in full immediately; in fact, depending on the estimated length of construction time, buyers can save for years to comfortably afford their mortgage. This makes presale an affordable option for most condo buyers.
- Ultimate customization: Buying a pre-sale condo unit means having the ability to customize your home with multiple finishing and color palette options. Whether it is being bought as a home, rental, or investment property, you have the power to customize the interior of your new home.
- Little to no maintenance: Due to pre-sale housing still maintaining its newness, especially in comparison to resale properties within the condo market, little to no maintenance will be required. This further heightens its return on investment and makes the initial investment immediately worthwhile.
Whether you are a renter, potential home buyer, or investor, the advantage of a pre-sale condo building is that they guarantee both a beautiful customized environment and money back on investment long-term. We would argue that their myriad benefits outweigh their challenges, especially in comparison to the comparatively stunted benefits that resale condos provide!
Discover the Joy of Pre-Construction Condos With Harbourview District
As a master-planned community with a strong sense of community, Harbourview District touts all the benefits of pre-construction condos… and more!
Brimming with general accessibility, walkability, and investment opportunities, Harbourview District plans to build 300 more homes in the area, all of which are multiple mid-rise condo developments linked by lush green space. It blends the benefits of urban living with small-town beauty.
Visit our list of pre-construction homes for both for sale and for rent to discover the benefit of buying pre-construction (and general condo living!) today.