CONDO BUYER

Mediaplanet What are your top tips for first-time buyers?

Scott McGillivray Plan your budget and get pre-approved for financing before you start looking. Buying your first place can be emotional and it’s really easy to spend more than you can afford. It’s tough in a city like Toronto where prices are so high, but do your best not to buy at the top of your budget. Leave yourself some breathing room for things like repairs and increased common expenses fees. There are a lot of costs that you have to incur when you switch from renting to buying, so be prepared.

MP How important is research for first-time condo buyers when entering the market?

SM Very. It’s important to knowthe rules and regulations of the condo board for various reasons. For instance, firsttime buyers who are struggling financially may want to use a service like Airbnb to rent it out on the weekends, and some condo boards don’t allow that. In fact, many restrict the number of tenants allowed in a year.

MP What common mistakes do first-time condo buyers make? How can they avoid them?

SM Forgetting about common expenses fees is a big one. The purchase price is only one part of the cost, and in some cases, common expenses fees can be even higher than your mortgage payments. You need to factor the existing fees into your budget but also be aware that they can go up every year, so give yourself a bit of breathing room. Also, you still have to pay property taxes with a condo. A lot of people mistakenly believe that you don’t.

MP What are some things buyers should keep in mind if they’re considering purchasing a pre-build?

SM With pre-construction condos you have to be prepared for big delays in the schedule. I suggest planning to move in six months later than the original move-in date, and have an additional backup plan justin case. You also need to be aware that the closing costs maybe higher. They can include everything from development charges to initial utility hook-ups. They’ll always vary by building, but do your research ahead of time so you know. And keep in mind that any money you pay once you take occupancy, but before you take ownership is paid to the developer — it does not go towards your mortgage.

MP What are some considerations for first-time condo buyers looking to use the property as an investment vehicle?

SM There’s a lot you need to know if you’re investing. Obviously you want to know the rules as you may not be allowed to use it as a short-term rental. But also, if it’s a preconstruction condo, you need to be aware that the occupancy date and ownership dates can be different. Purchase agreements often have restrictions during occupancy periods that state you can’t sell and can’t rent until you take official ownership. If you’re counting on rental income during this time it can really cut into your profits. If you’re buying it as an investment property, I suggest trying to negotiate this into your contract.

HGTV’s Scott McGillivray sits down with Mediaplanet to discuss the importance of utilizing all available resources when looking to purchase your first home.