There are many avenues in Vancouver Real Estate, where investors benefit from their real estate investment.
Vancouver Presale or in other word, preconstructions in Vancouver is also one of this avenues where not only an avid real estate investor can benefit and leverage and benefit from the market growth through only their down payment, but also any first time buyers can benefit by going through this process step by step.
There are 2 major benefits in answering why buying presale in Vancouver area.
1- Anticipation of a move.
Whether you are downsizing or upsizing from your current resident. It gives you an ample time to plan ahead for your move and organize it. Keep one important factor in mid that completion date of any Vancouver presale and preconstruction is only a projection and an estimate and in most cases for variety of reasons the completion date can be delayed and extended. For the presale buyers whom have sold their resident and have a certain date to hand in their property to the new buyer and are counting on a certain projected completion date, it is advisable to have a flexible date term agreed with their own property purchaser, or have a temporary place set up for that uncertain period of completion. This scenario also similar for new first time Vancouver presale buyers whom have to provide proper 1 month notice to their current property owner.
Considering this fact about the projected completion date, purchasing a presale condos or presale homes, can provide an ample time and more comfort to plan ahead.
2- Presale provides allows purchasers to save for their down payment.
This is an amazing opportunity for first time buyers or other investors to have enough time to save for the perfect amount of down payment.
Let's dig in to it further. Depending on the presale unit price, other than the financial stability and debt to income ratio which qualifies a purchaser for mortgage, financial institutions have a rough estimate on percentage of down payment yet depending on the purchaser's credit and the presale unit price.
For instance, the units under $500,000 may require a five to 10 percent down payment. between $500,000 to $1 million dollar, minimum of ten percent and from one million to 1.5 million is 20%. above 1.5 million sometimes is 50% of whatever amount goes above. Lets have an example:
A property is priced $1,700,000
Up to $1.5 million is 20% so requires $300,000 down payment. The remaining $200,000 is at 50% so it works out to be $100,000 additional down payment. So the total down payment is $400,000
Keep in mind on 2 important facts below:
1- Each financial institution have their own calculation and qualification on amount of down payment requirement and the number discussed above may be way different than what the actual financial institution requires from a real estate buyer.
2- Developer deposit requirement also may be different than whatever discussed above regardless of the price of the unit. Some developers may require less or more amount of deposit based on the presale quality, and developer's plan. In most cases one of the advantage of buying a presale in Vancouver is that this deposit can be stretched through instalment and batch payments in future. For instance, a presale developer may require 10% at the time of acceptance of the contract, and the remaining of the 10% needed deposit can be split into two future set date to help the purchaser save for that deposit amount.
Hope you found this article informative. If you have any questions on why purchasing a presale in Vancouver, contact me at 778-636-7707
Photo is credit to: Millennium Central Lonsdale