No offence but I think you ARE looking at it completely from the wrong perspective but let me tell you why. The investors that I work with are in the pre-construction game BECAUSE of the capital gains. They couldn't care less about cash flow because their intention is not to rent out and be a landlord in the first place. Landlording is only a backup option to their original plans, which is to sell the property while it's hot and walk away with a large sum of cash. Some might call it speculating but I just call it winning and smart investing. The reality is you are not going to get cash flow generating condos in Toronto unless you are putting a serious amount of money down like 30%+. If you really want a cash flow generating property, go buy a house in Hamilton, fix it up, deal with tenants and rent it out and get like $300/month cash flow but I can guarantee you will not be getting the type of capital gains you see in Toronto because the demand is so much higher in Toronto. Let me show you what I mean with some real life examples of what I have accomplished with my clients in the past.
1) $50,000 (deposit to builder) invested in a small DT 1BR near University/Adelaide. Profit was $88,000 by assignment which represents a 176% return on invested dollar. Purchased in 2007 and sold in 2011.
2) $125,000 (deposit to builder) invested in a 2 BR at Yonge/Bloor. $250,000 profit which represents a 200% return on invested capital. Purchased in 2008 and sold in 2012.
3) $100,000 (deposit to builder) invested in a 2+Den at Yonge/Sheppard. $91,000 profit which represents a 91% return on invested capital. Purchased in 2008 and sold in 2011. I felt like he bought this one too expensive in the beginning but it still paid off.
These are pretty staggering numbers any way you look at it, especially when you don't need to lift a finger except to tell the lawyer which bank account to direct the money. Take it from me I am in the field working and seeing these types of numbers every single day and you can do the same thing too (maybe not these exact figures because nobody can guarantee you an ROI figure). Some would argue that those days are over but in today's market, you just have to be smart with your capital and strategic in your decisions and you may get a pleasant surprise 3-4 years down the road. I don't know of any better "off-hands" investments than precon condos in Toronto. If you do, please feel free to share as I would love to know!
Truthfully, there must be a reason why there are so many investors flocking to condos because it is so lucrative and so easy. Investors in this city have been making absurd amounts of money doing this and I can certainly attest to that. I can help you achieve similar results if you want so let me know which projects interest you and I can give you my honest opinion/feedback about those and any other condo projects. I always have Platinum VVIP or VIP entrances into the hottest new projects in the city and good relationships with builders so let me see how I can help you achieve your financial goals!