Condos are great options for buyers who may be looking for something more affordable than traditional single-family homes. They’re also great for people who like the idea of less maintenance and more built-in amenities. Further, condos tend to be in close proximity to transportation and city centers, making the live-work-play environment an ideal one.
But when it comes to buying a condo, should you choose resale or pre-construction? The truth is, there are pros and cons to both, so you’d be well-advised to consider them all before deciding on one over the other.
Pros and Cons of Buying Pre-Construction
There are some obvious perks of buying brand new construction, but there are a few drawbacks as well.
With any pre-construction project, you’ll have the freedom to choose your finishes and sometimes even your layout. This will allow you to fully customize the look and functionality of the condo and appease your tastes in terms of decor and style.
Obviously, new construction tends to be more energy efficient simply because of newer and more modern materials being used. If you buy a unit in an old building, you might not be awarded such benefits.
Because all materials and finishes are new, the odds of something breaking down or requiring repair shortly after you move in are minimal.
Build Equity Through Appreciation
Many buyers purchase pre-construction condos in order to take advantage of appreciation. By the time they take possession, the odds of the unit being more valuable than what they paid for it are pretty good. As long as the market continues to be healthy, there’s a good chance that you can build instant equity this way.
It seems that with each new development, developers tend to build units that are smaller and smaller in size. Condo developers are in the market to make money, so if they can increase their profits by reducing square footage, they’ll probably do just that.
Noise and Dust
If your condo happens to be the first phase of many, odds are you’ll have to live in a construction site until the entire development is complete. In the meantime, expect a lot of mess and noise.
Delayed Move-in Date
Like any other type of new development, there is always the chance of delays. Anything can happen, and it usually does, leaving condo purchasers waiting for their ultimate move-in day.
Developers tend to charge condo buyers a sizeable one-time development charge to cover the cost of new infrastructure. Developers have to pay the city for these fees, which they will then pass on to buyers.
Pros and Cons of Buying Resale
Resale condos also come with their own set of perks and drawbacks, including the following.
Move in Right Away
Rather than having to wait until the condo is complete, as is the case with pre-construction, your unit is ready for you to take, depending on the closing date agreed upon with the seller. There’s no risk of delays and having to wait around for development completion, which can be a real nuisance if you have to coordinate the sale of your current home. You won’t have to deal with such nuisances with resale.
Get a Feel For the Neighborhood
You’ll also be able to get to know the neighborhood and the people who live in the building, which is not something you’d get to do with pre-construction. Resale will allow you to get familiar with the amenities in the area as well, which can help you determine if the area and the building suit your lifestyle.
Units Are Larger
Generally speaking, older buildings tend to have larger units, as explained above. For the same price, you can have a much larger unit that affords you with more space to do with as you please. These days, condo developers are hesitant to build larger units with multiple bedrooms because of shortages in affordability. Why should they take that chance when they can make more money on a per-square-foot basis with smaller units?
Older Finishes and Materials
There’s something to be said about something that’s brand new. But with older condos comes older materials and finishes, which not only means that they may be more likely to be outdated, but they’ll also require more maintenance and repairs.
You won’t be able to customize your unit with a resale as you would be able to with pre-construction. While you might be able to make certain upgrades and changes (as long as you’ve been approved by the condo board), you won’t be able to make more in-depth changes that you could with pre-construction.
Potential to Dish Out For Repairs
If the building you buy in happens to be on the brink of requiring a new roof, newly paved parking lot, or anything else that requires replacement or repair, that money’s got to come from somewhere. If the building’s association is not managing money properly, you could be stuck with major condo fee hikes to cover these costs.
The Bottom Line
Both resale and pre-construction condos have their own set of advantages and disadvantages, and the one you choose should closely align with your lifestyle, tastes, and needs. Work with a seasoned real estate agent who can show you examples of both and go over some of the units available in the area you’re looking in before making your ultimate decision.