New To Condo Investing? Here is What To Look For When Choosing a Developer
Behind every good condo investment is a good condo developer. The two go hand in hand. Yet still, there are condo buyers – both future homeowners and investors – who don’t give enough consideration to the intricacies of choosing a condo developer.
The reality is that a condo developer matters as much as other factors that go into the buying decision. If you’re in the process of choosing a condo as an investment, it’s worthwhile to learn as much about the developer as possible.
How To Choose Your Condo Development
All condo developers have their own “quirks” so-to-speak – ways in which they plan, build and market their highrises. They can be perceived as either beneficial or detrimental. Regardless, their approach to developing a condo will either attract or repel tenets. Or, it may encourage tenants down the road to sell if they feel they aren’t getting the value of their purchase, which ultimately affects you as an investor.
Learn About Their History
Reputation is everything when deciding to invest in a condo from a specific developer. First, consider what their completion/failure rate looks like. If they seem to have had a number of condos that were cancelled or exceeding their Outside Occupancy Dates (Tarion Dates), then that’s a red flag to avoid them.
On the other hand, if they’re known for completing developments on time or early, then they’re worth your consideration. But don’t stop there. Also get the perspective of residents from these developments, either through online reviews or in-person discussions. Find out what a day in the life is like at their condo, as this will give you a sense for whether the development is a welcoming one or if it may leave some of your tenants feeling uncomfortable.
Another factor to consider is whether the developer has their own builder or if they outsource the construction. If a particular development has outsourced their construction, it’s important to look into the builder to verify their experience and quality of work.
A reliable way to verify the reputation of these builders is to look for them on Tarion. The company has offered new home warranty protection for 40 years to more than two million homes in Ontario.
You can search their site for a list of Ontario’s builder directories, which will give you plenty of information about a builder’s information. Vital reports on whether the builder has had any major cancellations or structural defect claims will appear on this page.
Take a Good Look At Their Management & Policies
While looking at a developer’s history indicates prior performance, looking deeply into a property’s management company gives you a sense of its current state. Keep this in mind: a good thing can come to an end (and vice-versa) depending on a condo’s management. So make sure to look at things such as reviews where residents mention interactions with management. This also includes management policies and how they comply with industry standards.
Also, consider a development’s policies. For example, you should find out whether the developer allows leasing during the interim occupancy period or not. This is important because registration could take up to a year. Some developers will offer this as an incentive while others skip it altogether. Ultimately, this will mean a year of paying interim occupancy fees before before living in the unit.
Finally, don’t forget to consider even the basic customer service within a condo as well. The last thing you want is to invest in a condo with management staff who treats their tenants poorly.
Look Out For:
- Look into how and if they conduct pre-delivery inspections and the general way in which they facilitate move-ins for tenants.
- Consider too how proactive a developer is. Repairs and deficiencies are inevitable from time to time, but what matters more is how long it takes a developer to address the problem.
- It’s also important to see how they deal with new tenants, whether they address their concerns as needed and if they maintain basic etiquette such as returning phone calls on time.
Know What Amenities & Perks They Offer
A well-managed condominium built by a developer with a great history still has little to offer if its amenities don’t fit buyers’ needs. That’s why it’s beneficial to look at a condo’s facilities. Remember, every buyer has their own lifestyle and ideal standard of living they want to maintain or achieve.
Some condo buyers are looking for family-friendly units, and therefore want bigger spaces with more bedrooms. Others are keen on an active and social lifestyle, insisting on fitness rooms and swimming pools, and spaces where residents can gather together.
Realistically, few condos can offer every amenity, but you should choose a developer known to offer a balanced mix of amenities to keep residents entertained.
Choice of Locations
Although reputable condo developers tend to vary their choice of locations (for different reasons), it’s worth noting if some choose certain neighbourhoods and locales. You need to have your ideal buyer in mind when choosing developers who build in certain locations.
So if you’re looking to attract, let’s say, young tenants who want to start families, you may want to target condos located in neighbourhoods with parks and attractions nearby. Or what if your ideal tenant is an affluent, upwardly-mobile couple who spends much time in a downtown office? You might target a development that’s near gyms, restaurants and grocers that makes it convenient for them to run errands and carry on with their routines.
The Right Developer Means The Right Investment
As an investor, your ultimate goal is to maximize opportunity and minimize risks. That means picking a condo developer that offers an environment that satisfies your tenants, and you’ll need to do the legwork of learning who these developers are.
However, the effort is worth it. By acquainting yourself with the better condo developers in Toronto, you’ll set yourself up to make the investments that will keep your tenants and yourself in good standing.