Scarborough condos offer an affordable option for homeownership with all the conveniences of home, and none of the maintenance woes of a house. Condos or condominiums are multi-unit properties, usually associated with high-rise buildings. However, they are also available in townhouse complexes and low-rise buildings.

Many people get confused between apartments and condos. The main difference between the two is that an apartment is rented, and a condo is purchased.


Why Condos are a Good Investment


Scarborough condos make an excellent investment as they are in an area where rents are not as high as the downtown core of Toronto. Therefore, you will find a wide selection of tenants looking for affordable rental units offering higher-end finishes and a more luxurious lifestyle without the crazy price tag. You can also purchase a unit for less than you would in Toronto, yet still get a good ROI especially if you purchase a pre-construction unit.  


When considering Scarborough condos over a single-family home, you also get more bang for your loonie thanks to the additional amenities. Depending on the community, you can have everything from a pool and clubhouse to golf courses or tennis courts. You have the luxuries of living in a high-end home, without the high maintenance costs because you share the maintenance fees with other owners.


As well, because condos are more affordable you can live in an area where buying a house would prove too costly. This allows you to choose a lifestyle that you would otherwise not be able to afford. Of course, you have to consider the fees associated with condo ownership. In some cases, all in, it could be almost as expensive as a single-family home mortgage once you add on maintenance fees. However, keep in mind that in exchange for maintenance fees leaky roofs, peeling paint, and gardening are all handled for you. This makes condo life very low maintenance compared to homeownership where you have to do the work yourself or pay someone to do it.


Some people also like the strong sense of community in condo buildings as you all share an interest in the property. You can meet people while sharing amenities and some developments even have committees that plan events. Of course, you can also choose to keep to yourself if you prefer!


Pre-construction or Resale?


One of the main things to consider when hunting for a condo is whether you want a pre-construction unit or a resale unit. A pre-construction unit allows you to buy a brand-new unit that is either just completed, or in the process of construction, whereas a resale condo has already been occupied. There are pros and cons to both options.






  • You get to customize your unit with your choice of finishes, appliances, cabinetry, flooring, etc. AND choose the view, floor, and configuration you prefer.

  • In some cases, pre-construction condos can be less expensive, especially in the early stages of construction.

  • Your deposits are paid in installments as opposed to a lump sum for a down payment. This gives you more time to save the 20 – 25 percent of the purchase price required.

  • You never have to worry about bidding wars with other people interested in the unit.

  • Newer condos have lower maintenance fees.




  • Although it can be more affordable to buy pre-construction, you will have to pay a higher deposit of 20 to 25 percent, compared to what you would for a down payment on a resale.

  • You are usually buying from nothing more than a virtual tour, or floor plan which can be misleading or hard to visualize. 

  • Because you are dealing with construction, it can take years to complete, with delays to be expected.

  • If the builder fails to sell enough units, they might not even proceed.

  • There are also several reasons that a developer might not complete construction.






  • You can tour the unit and all the amenities, so you know if it suits your needs.

  • You can see if the building itself is well-maintained and well-managed.

  • You can negotiate a closing date that suits your needs without worrying about delays due to construction.

  • You can see exactly how much your mortgage and fees will cost making it easier to get a pre-approved mortgage.




  • You might find the unit is outdated and in need of renovations.

  • The building itself will be older and therefore have higher maintenance costs.

  • If you are considering a high-demand area, you can end up in a bidding war, costing you more money, or worse costing you the unit if you are outbid.


How to Make Money on a Condo Investment?


Today condos offer the best ROI compared to purchasing a house in the GTA. Considering there was a 14.4 percent decrease in the average price of a detached home in Toronto compared to last year, it’s clear the crazy high prices just weren’t sustainable. However, when you look at condos, they saw a 3.2 percent increase.


Condos are also in high demand by renters, making this an opportunity to purchase a condo as an investment property. In Toronto, 47 percent of households currently rent which means you will have plenty of tenants willing to rent your unit.  


That said, there are some things you have to consider if you want to make money on your condo investment including:


  • Down Payment: You will need to put down 20 percent for an investment property. Having more for your down payment works in your favor as it lowers the amount you have to pay for your mortgage allowing you to make more money off your rent.


  • Fees and Taxes: Make sure you understand the fees included in condo ownership such as maintenance fees. If you hire a property management company it adds to your expenses, but these fees can be written off along with interest for your mortgage. Also, rent counts as income which has to be reported on your taxes.


  • ROI: Keep in mind as with any investment you cannot be guaranteed the unit you purchase will increase in value. Make sure you get the best possible deal in the best possible area to help avoid depreciation.


  • Research: You have to research the developer and find a company with an excellent reputation. If you can, shop resale units in buildings they have built in the past. You also want to review the building’s Status Certificate to make sure there are enough reserve funds to cover maintenance, as it is possible for poorly managed buildings to go bankrupt. Research what you can expect to charge for rent in the specific area you are buying, as well as the potential for depreciation.  


If you are shopping around for Scarborough condos with investing in mind, it is in your best interest to work with a real estate agent or broker that specializes in condos. They can assist in researching developers, as well as advise you on the best areas to purchase for impressive ROI.

Financial Facts about Buying a Pre-Construction Condo

28 November 2018
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