With signs of uncertainty in the market, it has never been more important to analyze your next real estate investment. Jumping into the unknown and hoping for the best is risky business. While this tactic may have worked over the past few years during Calgary’s more lucrative real estate market it is even more risky in this economy. Real estate has never been a fool’s game and now is the time to switch strategies and become more diligent for a greater chance of success.
It’s also not a great idea to sit on the sidelines with your cash. Downward market shifts can be great because it amplifies the good, the bad, and weeds out the average. Keeping all of that in mind let’s take a look at some important factors you need to consider before buying a newly built condo, whether it’s for an investment, an upgrade, or your first home.
- Pricing
There’s an old saying in real estate – you make money in real estate by what you pay for your home, not when you sell it. Pricing is the easiest way to ensure that you are on the right track. If you are buying in a hot market or a popular neighborhood you may end up paying an inflated price for the location, and what if that location is no longer the hot spot when you are ready to leave? Stay away from inflated prices and trends.
- Developer Experience
The problem with heated markets is that it attracts amateurs that want to get in on the action. More often than not these products lack quality and design. They may look great on paper but the underlying issues will make you want out faster than the ink can dry. If you are looking to buy a newly built condo try to buy from a developer with plenty of projects already in their portfolio.
- Location and Neighborhood
Condo investments, resale or new, hinge on their location and the neighborhood that surrounds them. The neighborhood makes the condo and not the other way around. This doesn’t mean that the neighborhood has to be completely developed and urbanized; it just means that it has to have the foundation for resale and rental capacity.
- Location of Your Unit
Consider your view and location within the building. Try avoiding units near the buildings garbage area, parkade and the main lobby. A good view and location in the building will always make your living experience more enjoyable than one without. Keep in mind that a below average view has the ability to adversely affect your resale potential.
- Running the Numbers
Most first time buyers will know what they want to spend on a mortgage payment every month, and how much they have been pre-approved for but the numbers go so much deeper than that. Do you know what the monthly condo fees will be? Will you have to pay for your utilities? What about a parking stall? Even the closing costs vary when it comes to buying a condo versus buying a regular home. Make sure you have a good idea of what ALL of your monthly costs will be before you make your final decision.