Re: Rental Income vs Condo Sale

Amit,

Eric provides good advice.

As someone who has done both for a number of years I must admit I have
a bias for buying off-plan (buying from the developer's plans before
the units have been built). I have done so in both the US and UK but
not Canada.

I think of buying off-plan is like owning a rental without a tenant or
a mortgage, etc.

Down side?  You might find the unit you are buying did not rise in
value and/or the mortgage market changed enough to cause a problem
when it is time to actually complete the purchase.  If you are going
to sell on before completing, some developers will block this (read
the contract) and/or there are lenders who do not like to lend to the
next buyer.  I can explain further if you like. Send me an email
though as I do not actively check this newsgroup.

Two other issues if you do want to own the unit long term. When your
unit is done there might be a lot of other units coming on the market
at the exact same time. Hence you have lots of competition for a
tenant. If your unit is finished in an earlier phase of a multi-phase
project you might find that you have a problem with tenants who do not
want to live at a building site.

John

eric <[EMAIL PROTECTED]> wrote in message news:<[EMAIL PROTECTED]>...
> For the rental, evaluate your return on investment and your cash flow.
> Will the gross rents pay the mortgage, taxes, fees, maintenance,
> vacancies etc and provide enough cash to satisfy your operating margin
> and  ROI needs? Also, are you sure you want to be a landlord?
> 
> For the builders condo..Will you get a pre-construction discount? What
> is the difference in pre-construction cost and anticipated selling
> price? Will this diference meet your profit needs after sales
> expenses?
> 
> Make sure you analyze the rental and sales markets in your area. Know
> what you can reasonably expect and make sure you have a clear way out.
> 
> Do your due diligence. Minimize your risk and maximize your profit.
> 
> http://www.creonline.com/
> http://www.mrlandlord.com/
> http://www.landlordassociation.org/
> http://www.nationalreia.com/
> http://www.nreionline.com/
> http://www.thecreativeinvestor.com/
> http://www.canreig.com/home.htm (Canada)
>  
> 
> 
> 
> 
> 
> On 21 Nov 2003 20:13:22 -0800, [EMAIL PROTECTED] (Amit) wrote:
> 
> >What is advisable if someone has 15% down payment for an investment
> >Condo:
> >
> >To buy and rent out a newly built condo right away and start paying
> >mortgage from rent or to book a builder's condo that will be completed
> >in 2006 and Sell it later for profit?
> >
> >Both the above options pertain to Mississauga Ontario. The builders
> >are highly reputed and the deposit is guaranteed by the provincial
> >government plan of ONHWP.
> >
> >Thanks,
> >
> >Amit