Hi Sam,
Most of our work is working with clients who purchase real estate for investment. In terms of where the market is headed, there is no one on this board anywhere NEAR qualified to answer that question. There are a number of predictors, some say everything is hunky-dory while there are other predictors that indicate doom. There are thousands of predictors in play and even the most advanced economists argue what is going to happen.
A few things to note as to why the general consensus points to why Canada will remain strong:
a) Our lending policies - special attention to the CMHC which protects our mortgages
b) Canadians (generally speaking) have more equity in our homes meaning we are less likely to walk away from our mortgages if the going gets tough
There are number of ways to invest in Residential Real Estate, however, the ones that you alluded to (and the most popular) are:
a) Buying Resale and Renting
b) Buying Pre-Construction and Flipping
c) Buying Pre-Construction and Renting
Out of the three, my clients in the past 5 years have been the most successful with b) Buying pre-construction and flipping. I am going to go through each of the three options below and give a little pro/con to each.
a) Buying Resale and Renting
Making money by purchasing a resale condo and renting it out would be twofold:
a) The monthly cashflow from the rental income
b) The appreciation rate of the condo year after year
These two kind of work against each other in that: (generally speaking) areas where you will see greater cashflow will generally indicate a low appreciation rate and vice versa. Areas of high appreciation rate (Downtown Toronto) generally yield negative cashflow. A condo that costs you $1600 to run per month (mortgage/tax/mt.fees) will generall fetch between $1500-$1650 per month. However, in Toronto where there are certain pockets of very high appreciation rate (think approx 10% per year) means that your Condo which was worth $300,000 last year is worth $330,000 today. So assuming you lose $100 per month on cash flow, you are still up approx $29,000 at the end of the year "on paper".
On the flipside, if you were to purchase somewhere like Mississauga - you can yield $200-$400 per month cash flow, but would only expect approx 5% appreciation. This means that your townhouse that was worth $300,000 last year is only worth $315,000 this year, but you've also made approx $4,000 in positive cashflow. You're up $19,000.
However, in terms of risk - in Toronto you would see a better return on most years, however, if the market were to turn sour you're left with negative cashflow on top of decreasing values. Whereas somewhere like Mississauga you know that you're not losing month-to-month.

b) Buying pre-construction and "Flipping"
This is my favourite way of playing the market if the market conditions allow you to (as they have in the last few years).
Providing you pick the right development that is priced correctly and in a high appreciation neighbourhood then you can make very good money playing this game. I have a number of clients who will purchase a condo that closes in 3-4 years time, put 15-20% down and then sell as soon as it is ready to sell.
Why do I like pre-construction so much?
Your deposit is HEAVILY leveraged. You're only putting down 15-20%, yet your property is appreciating at the full 100%. Suppose you purchase in an area that has shown appreciaton of 10% per year, and you purchase a property for $300,000 where it closes in 4 years time. Provided the $300,000 that you paid was of market value at that time, then your property stands to increase by approx $120,000. On top of that, you have only put down approximately $50,000 - meaning you can potentially get your $50,000 back and then an additional $120,000 in your pocket.
The most successful one of my clients has been with this was a 4 year turnaround project, with $30,000 deposit - they got their $30,000 back and a profit of $125,000. I don't know of ANY other investment vehicle on the planet that will allow this kind of return.
I invest in pre-construction very heavily myself - I currently own 6 pre-construction condos in high appreciation areas in Toronto. I used to own 3 rental properties in Mississauga before selling them and putting money into pre-con in Toronto.
There is a lot more to this than meets the eye, and I'm happy to go into more detail with you - including which projects right now are good and how many you should purchase etc.
c) Buying pre-construction and renting
This is an extention of B) - if you do not want to sell immediately, you can rent the condo out. The benefit is that you will close the gap a little on the negative cashflow I mentioned above - you are, in theory, paying 2010 prices for condos that are closing in 2013/2014 - and you will gain the advantage of the rent being higher in the future.

There is a lot of info above, hope you find it useful. Let me know if you would like anything clarified. I write a lot on my websites about which developments I like and go into a lot of analysis and you can find samples of how I analyze developments below:
amitandroy.com : Chaz on Charles - http://www.amitandroy.com/new-developments/chaz-on-charles
TalkCondo : Bisha - http://www.talkcondo.com/toronto/bisha
(Note: talkcondo is my new website and is still being populated, Bisha is the first development that I have written about)

Hi Sam,
Roy went through a lot of detail about buying real estate for investment and did an amazing job at it. I work with lots of investors as well but generally don't do new condo project rather rehab and flip properties. I look for properties that show an upside in terms of area they are in or a particular property that has an upside. I usually blog about my picks on daily basis if I find one at www.TorontonianOnline.com.
These type of investments usually require someone with more hands on experience and ability to look past a lot of "junk". The returns are more lurative but so in the initial investment as well (depends on the purchase and condition of property).
I ask any clients I have that are new in real estate to invest in new condos as it's a much safer bet. you don't have to worry about contractors/permits/city etc etc etc... Just collect a return after three to five years. Experienced investors are able to take on one to two projects a year and generate anywhere from 50K to 200K per project.
Hope this helps...

Thanks Roy - very interesting analysis; and thanks Addy.
New construction and then flipping sounds very attractive, but there has to be a down side. Do you know or can you can you guestimate what percentage of investors have actually lost money by buying pre-construction and flipping? I guess that a critical issue is ensuring that you buy from a reliable, competent builder.
Thanks .....

The downside is that there is of course risk and that your 15%-20% is tied up for 3-4 years with no monthly return. The following would be issues to consider:
a) Am I buying from a reputable builder/are my cheques made out properly? There are a number of stories where the development has died and because the cheques were not made out to "IN TRUST" they never saw their deposit. The two words "IN TRUST" are of extreme importance.
b) At what stage are you buying? If you understand how builders "tier" their pricing, you will realise that the earlier in the process you buy, the cheaper you will buy at. Since June, my clients are collectively up approximately $1 million based solely on the price increases since the time that my clients got in. While it may sound that I am trying to sell a Realtors services, but my general rule is that if you can walk into a sales office and purchase a condo without an agent, you're already too late. Prices have already been increased 3-4 times and various perks have already been removed.
c) Can you close the deal? Many buyers put down the deposit but are unable to CLOSE the transaction (i.e. get a mortgage) as they hope to flip the condo before they take over (assigning it). This is playing a very dangerous game and we have heard people getting stung like this. If you can assign the condo it is a bonus...if you cannot close on the condo then you are probably playing the wrong game.
d) There are a number of critical issues that I look at when determining whether a development is "worthy of investment" and I started a thread a little while back on this forum that discussed it (I would put the link here but I am currently writing this on my phone while the whole family stares at me during halloween family time :)) - this past year there are maybe 6-7 developments where I would have put my own money into - but that's it (Don't want to go into that here for fear of harming my reputation with certain builders :))
To answer your question have investors lost money - the answer is probably yes. Most of them do not work with pre-construction specialists and there are a few around that really know what they are doing. Other agents will just sell you whatever development you like, but I (and a few others I know) will genuinely give you direction on where and what to buy. Most of the time I am buying one for myself so you know I am serious about it ....
Many investors do as I have said before, they walk into a construction sales office and buy a unit without realising that the prices have already increased and you are probably out most of your forecasted profit.
There are a number of other developments where I KNOW people have not made money because they were paying an inflated price in the beginning. The market simply did not catch up the price that they originally paid. There are 2 or 3 MAJOR AAA projects in Mississauga that I know people have invested in and broke even and even lost a little when they had to sell immediately.
None of my clients have ever lost money buying pre-construction, and pretty much all of the time they have more than doubled their money.
If you know what you're doing, there is excellent money to be made in pre-construction - but please do ask questions and I'm happy to answer them (as soon as the family stops staring me down....)
Thanks,
Roy

It is important to note that while you can make money buying pre-construction condos and waiting for the price to improve, this *is not* investing, it is SPECULATING.
You are counting on inflation & demand (that is currently greatly inflated because of interest rates being kept artificially low) to carry the market up, and if it doesn't, you can lose money every month AND when you exit the investment (as correctly noted above).
Buying negative cash flow properties in the hope they increase is not a sustainable investment plan for most people.
I recommend to my clients - I'm a commercial agent who helps people with investment real estate - buy properties that make sense today. Don't buy based on "what if" or "but in 5 years" etc. This isn't to say don't buy with an eye for the future - we all do that - but make sure the investments make sense today.
ASK: If prices stayed flat for 5 or 10 years, would you be comfortable holding it?
(PS this advice is worth what you paid for it :)
@benjaminbach on twitter, or http://benjaminbach.com
(PS I'm a sales rep and Director at KW Commercial, i'm not trying to solicit business from other brokerages, yadi yada yada)

Hey Ben,
Thank you for making the distinction about Investing vs. Speculating. All too often we get caught thinking speculating is investing and end up putting all our eggs in one basket. This is partially the reason why I've always been reluctant to post about new developments for investment rather would suggest it to newbie investors for them to get a taste of it.
Thanks for opening this up for me...

In good times it can be great. In bad times.... well, go look at Nevada and Florida :)

and we know that there's no way to really predict the future...
We can see how additional income can be generated from investment properties to help the bottom line because prices when dealing with investment real estate are driven by income and local cap rates amongst other variables...
Sam,
This is just another perspective of investing in real estate... Is it right or wrong?
Depends on who is looking at it...

In my opinion the best advice given is make sure it makes sense today.

Speculating is just investing with heightened risk, and sometimes heightened reward.
Benjamin's advice on making sure the numbers work now is great if you want to minimize your risk and great for income generating rental properties.
However, someone buying into a pre-sale with the thought of flipping it soon after completion for a profit is taking on a risk in the speculation they can make a huge profit. Their goal is ultimately different from the person buying a rental property and they should be aware they are taking on a larger risk if the number don't make sense today, and if market values go down before completion and the property is worth less than their contract price.

Both are valid means of investing by definition and takes two different types of individuals. For the part time investor, speculative investing is much easier than to have a project that require management (though you can hire a property manager) where as other avenues such as rehab/flip/lease options require more tending too.
As mentioned, all are valid as long as you do something to attain your goals but don't go blindly into it. Do have some numbers to review and don't do it just because everyone is doing it...
Definitely an interesting chat so far about the topic...
Thanks Sam for starting it all :)

Lots of information to take in, especially regarding the difference between "investing" and "speculating".
However, I would like to throw in my own two-cents regarding the original questions from Sam as a non-agent.

sam said:
is this a smart idea...

Yes. As long as you are willing to hold on for the long run. Do not think of real-estate as a stock, but as something to hold long term. It may rapidly rise, and it may drop, but in the long run real-estate goes up.

sam said:
...given that I am not going to live in the condo where is the best place to purchase

There was a great discussion recently on purchasing properties at the "ends" of the City (if in Toronto). Personally, I find the east end of Toronto appealing as it has a lot of end users, prices are lower than the core and the West end, and has great public transit.

sam said:
.. should I buy a unit that’s already built, or is it better to buy one that is currently under construction or even just in the planning stages.

I think that was answered above.. but, it sounds like you have enough for a down-payment as an investment into a multi-unit detached home, where you could rent out multiple units. I still think that owning actual land is better than a condo.

sam said:
.. I have a few hundred thousand to invest – should I purchase one unit or more than one.

That is enough of a downpayment to purchase a few units in different areas of the city... or, see my option above.

sam said:
Finally, I don’t have time to manage the investment – any suggestions on this.

In line with the two questions above, have you heard of "bulk deals"?

Brian said:

Yes. As long as you are willing to hold on for the long run. Do not think of real-estate as a stock, but as something to hold long term. It may rapidly rise, and it may drop, but in the long run real-estate goes up.

Smart advice
re: Roy, we sure can determine how much a unit will rent for today. We can survey what the other comparable units are renting for. As long as we're talking about existing units, thats doable
With the retail plaza you mentioned, we can do a needs analysis of the area, look at the demographics, get covenants from our tenants (for the layppl out there, these are guarantees for rent backed up by a national corporation - very common when dealing with franchises and national companies), look at the traffic counts over time etc. In short, we can do a lot of due dilligence. This mitigates (but doesn't remove) risk, so we can make an informed decision.
That type of investment (and other asset classes like an apartment building or a leased office building) are bought and valued based on the cash flow they produce - the investment yield.
With a pre construction condo, we sure can do a needs analysis and demographic study of the area, but that won't project appreciation. If you're buying a property NOT based on the yield - i.e. a property with zero or negative cash flow - but rather based on hoping it goes up, this is a complete unknown. Past performance is no indication of future return.
"However, in Toronto where there are certain pockets of very high appreciation rate (think approx 10% per year) "
How long will that go on for? What happens to condo prices when interest rates go to 5% - or 7% ?
When an economic downturn hits, the people holding pre-construction are a lot more exposed than someone holding a commercial plaza with quality tenants backed up by covenants.
Again, this advice is worth what you're paying for it :)

This is an excellent thread and you're really benefitting from the experience of a wide variety of real estate investing. The truth is, if done correctly there are a number of ways to make money using real estate. It's important to determine which works best for you. We've covered resale rent, pre-construction flipping and renting, commercial investing and there is some amazing advice on all fronts. I'm sure each agent has incredible success stories for all forms of investing.
For myself and my clients, Pre-Construction has been an incredible investment vehicle. I would not change a single thing looking back as it has made myself and many of my clients insane amounts of money for doing very little. I have seen it work so it's something that I stand by no matter what the naysayers say. I have seen my clients put 6-figure profit into their pockets with 5-figure deposits a number of times, and have the land registry to prove that many others have done it too.
Is it for everyone? Absolutely not. It is a calculated risk and not a risk that everyone is willing to take. There is no cashflow, which you are exchanging for a heavy leverage of your deposit. I meet with prospective investors everyday, and I know that some are willing to take on the risk and others are not.

^^Hey Roy, would you agree with Brad Lamb, when he says:

Brad Lamb said:
ALL YOU NEED TO DO IS BUY A NEW CONDO FROM FLOOR PLANS BEFORE CONSTRUCTION STARTS AND YOU WILL MAKE $40,000 PROFIT IMMEDIATELY!

Source: July 2009 Newsletter http://www.bradjlambmarketing.com/JulyNewsletter/newsletter.pdf
My response: http://blog.buzzbuzzhome.com/2009/07/brad-j-lamb-reveals-real-estate.html

I would agree with your retort. What Brad Lamb has stated is an over exaggeration of the truth and if you read the article he does state that you need to pick the right project....which is what it is all about.
I have stated already that:
a) Out of all the launches in the city I would have only put my own money into 6-7 projects. There are a few very high profile projects (some of which are featured on this very site) that I would not have highlighted as "good investments". Most of the time it is because they are not priced well and therefore limits the profit that my clients can make.
b) I KNOW of people (not my clients lol) who have not made money when buying from floorplans. Why? A combination of: overpriced for the location, buying in an area with low appreciation (does the average agent know how to calculate the appreciation rate of a building or an area? 99% of the agents I speak to don't have a clue and just do it based on speculation...). I used the example of a client who HAD to sell his condo in Mississauga immediately because he was moving to Vancouver. It is in "Mississauga's top condo location" by a Triple A builder. The problem? They were overpriced to begin with and the market never caught up to the price he had paid. He had a net loss of approximately $8,000.
c) There IS skill in buying and choosing pre-construction condos. Not all agents will agree with what projects are the best, and some agents will just agree with their clients and sell them whatever they want to buy. I do challenge my clients to think about different options before settling on a project and we go through pros/cons of each. Not all agents are cut from the same cloth, either. I was at a VIP launch earlier and had a casual conversation with a fellow agent and I asked him "any idea what the levies are being capped at?" and he responded... "What does that mean?". I thought... "your poor clients...".
You cannot say things like "buy a pre-con and you will immediately make $40,000" because we all know it's not true. It's the same as saying "buy a commercial plaza and make $100,000" - sure there are commercial plaza's out there that will make you $100,000 but not all of them do. I do, however, believe that with careful planning and the ability to pick out a good project from the crowd, pre-construction is one of the best investment vehicles available to us.
Questions? Comments? I am really enjoying this debate... :)

Also, to carry on from the point...If it was as simple as "buy from floorplan and make $40,000" then agents such as myself, Andrew LaFleur, Mark Savel etc. would not be so successful with selling pre-construction developments. Believe me, it is not by chance. You can tell from a mile away which agents deal with pre-con this all the time and which agents do it part time. Picking a good agent to navigate you through the process is vital.

Real estate is a long term investment, 25 years and not 2 years. Does anyone know about the long term appreciation of a condo as compared to a house?
I always thought that with a house, the land is increasing in value (not the house). So, in 25-100 years, if the house has to be demolished or renovated, it is fine because the land has appreciated so much.
However, with a condo, what will the shape of the condo be in 23-45 years? How much repairs will have to be made on the structure of the building? I would imagine that it would be hard to sell your "land" in the sky if the condo is falling apart. And, if the building has to be demolished, how are the proceeds split between the hundreds and hundreds of suite owners?

A really interesting newspaper article was published today in the Globe and Mail called "Chinese stoke Toronto’s condo boom" dealing with the Chinese condo market in Toronto.
Some points that I found most interesting:

Globe and Mail said:
Estimates of their impact suggest overseas Chinese investors, the 100,000-strong local community and the 20,000 to 25,000 Chinese citizens who are students resident in the Toronto area now account for anywhere from 25 per cent to 40 per cent of all new condos purchased here.

Globe and Mail said:
The importance of Chinese investors is shown in the fact that there are six major brokerages now specializing in the trade and about 10 Chinese publications in the GTA dedicated to the real estate market...

Globe and Mail said:
...because of rent controls, about 98 per cent of new rental suites have come from investor-owned condos.

Globe and Mail said:
The three most important factors for them are location, price and design, says Mr. Chan. Design has to follow the principles of feng shui.[/quote
Source: http://www.theglobeandmail.com/real-estate/chinese-stoke-torontos-condo-boom/article1795047/page2/
Where are they coming from?
Why are they buying in Toronto?
Is this good and healthy for Toronto?

Jeremy said:
Real estate is a long term investment, 25 years and not 2 years. Does anyone know about the long term appreciation of a condo as compared to a house?
I always thought that with a house, the land is increasing in value (not the house). So, in 25-100 years, if the house has to be demolished or renovated, it is fine because the land has appreciated so much.
However, with a condo, what will the shape of the condo be in 23-45 years? How much repairs will have to be made on the structure of the building? I would imagine that it would be hard to sell your "land" in the sky if the condo is falling apart. And, if the building has to be demolished, how are the proceeds split between the hundreds and hundreds of suite owners?

To answer your first question, I think it really depends on the location of the house v.s. condo. I know some areas of downtown Toronto have seen a 9-11% year-over-year growth. There is even strong evidence to suggest that this will continue. Some neighborhoods with houses have been appreciating at 5% in some areas, and some higher.
By definition, Real estate is a legal term that encompasses land along with improvements to the land (buildings, fences, etc, that are fixed in location). Sometimes though, Real Estate can also refer to the land and fixtures together, referring to ownership of land and including anything of a permanent nature such as structures, trees, minerals, and the interest/benefits associated with ownership. (I paid attention in Real Estate Law!! ;-) ). So, real estate as a whole increases in value. For sure, if a home needs to be torn down, the land still has ‘value’ but I don’t think the land is worth as much as a home + land.
For real life scenarios, look around some of the prestigious neighborhoods, you will find lots of investors picking up the older, non-renovated properties, tearing them down and selling the land as lot’s – this happens a lot in Lorne Park (Mississauga). But none of these lots are priced at the same price as home + land. We personally own a lot in Grimsby but this lot is worth nowhere near the home + land. It just wouldn’t make any sense.
In summation, you are right in a way. Land will continue rising, but the future value is not as much as land + improvements to the land (eg, a home).
Your final question – hard to project that far into the future as to what the shape of a condo building will be. It really depends on the management company involved and how neglectful the owners are! I know there are some older buildings that look in great shape (relatively speaking) – even the maintenance fees have not suffered as much as newer buildings. Ones that come to mind are the older buildings on Palace Pier. If the building is falling apart and needs substantial repairs, those costs are passed onto the condo owners – but an important point to note is the owners have a say in repairs and where money is spent.
Remember, a condominium/condo, is the form of housing tenure and other real property where a specified part of a piece of real estate is individually owned but at the same time the use of and access to common facilities such as hallways, heating system, elevators, exterior areas is also under legal rights associated with the individual ownership and controlled by the association of owners that jointly represent ownership of the whole. Each "condo owner" is like a shareholder.
If the building needs to be demolished, I am sure there are provisions in-place for how the monies will be dispersed. As I said before, each owner is like a shareholder of the whole.
-Amit

There is no investment, speculative or otherwise, that goes up in a straight line and provides a meaningful return. Invest in yourself through education and it will pay off. Information and knowledge are the keys. Tip... Why rely on an Agent? Become one yourself (it's really not that hard) and make even more money on your investments.

Brian said:
There is no investment, speculative or otherwise, that goes up in a straight line and provides a meaningful return. Invest in yourself through education and it will pay off. Information and knowledge are the keys. Tip... Why rely on an Agent? Become one yourself (it's really not that hard) and make even more money on your investments.

Interesting...

Jeremy said:
Real estate is a long term investment, 25 years and not 2 years. Does anyone know about the long term appreciation of a condo as compared to a house?
I always thought that with a house, the land is increasing in value (not the house). So, in 25-100 years, if the house has to be demolished or renovated, it is fine because the land has appreciated so much.
However, with a condo, what will the shape of the condo be in 23-45 years? How much repairs will have to be made on the structure of the building? I would imagine that it would be hard to sell your "land" in the sky if the condo is falling apart. And, if the building has to be demolished, how are the proceeds split between the hundreds and hundreds of suite owners?

That is a great question, something I've often wondered myself.

^^I think... in that situation, the condo corporation would own the land and as a suite owner, you would be an owner of the corporation. As such, the value of that highrise site would have (hopefully) increased in value by a lot! And, if the corporation were to sell the land, as an owner, you would be privy to the uptake.
Can anyone confirm?

Hi everyone, this is my first post but I have been following this forum for quite some time.
I’m not an agent or a broken but I’m presently, and have been investing in real estate for about 10 years with a primary focus on pre construction condos.
I have traded many units in the past and I have to agree with Ben that preconstruction investment TODAY is strictly speculative on future appreciation and should ONLY be treated as such and with caution.
For example in 2001,02,03 and even maybe up to 06, preconstruction condo sales were not as glamorous as they are today. Pre construction purchases were seen as a risk investment and buyers at the time were not comfortable with purchasing on paper. Builders were aware of this and directly rewarded you by offering lower prices than the market.
This was definitely less speculative as you were buying at a discount, but never the less dependent on market appreciation rather than performance of your investment.
With today’s low interest rate environment, the large supply of pre-construction sales in addition to prices on par or higher than the current condo resale market I would be very cautious.
Having said so, I’m not disregarding the possibility of a greater demand and appreciation in price, nor disregarding the value of “long term holding” in real estate nor the value of an in-demand location and exposure, however I’m also not disregarding a serious correction.
Having said so, after learning a couple of hard lessons I now leave my decision making on an investment strictly to the NUMBERS and FACTS rather than the hype.
With a future % return in mind, I forecast 3-5 years out assuming a stable environment with a conservative property appreciation year over year. I account for all expenses related to the purchase and carrying of a property plus other factors that can impact your investment. (Local area’s tax trend, changes in interest rates, employment rate, demand, vacancy rates, marginal tax rate etc..).
I would then, based on the above, and taking into consideration tax implications, perform financial calculations for any given year of the investment.
If the numbers match my desired return rate and timeline I then purchase, if not I simply walk away.
This has helped me to not get wrapped up in the hype of a project or an agent and has helped me sleep at night.
I must admit that I have been steering away from pre construction as I can only project on a stable environment and cannot rely on a past performance.
Thanks for starting this thread Sam, and if anyone read this post thank you for reading.

Talk to a financial planner to get your finances in order - this will give you a clear idea of how much debt you can manage. A good financial planner will also take a contingency buffer into account. You should definitely diversify and get multiple condos seeing as you have the funds to do so. We think these projects are fantastic:
1 - http://groperty.com/Yorkdale_Village.html
2 - http://groperty.com/Local_at_Fort_York_Condos.html
3 - http://groperty.com/INDX_Condo.html

The real estate climate is leaning towards a buyers market now. Hopefully you didn't invest in multiple condos at the end of 2010?

Nice selection @Syed Shah. If you want to keep up to be kept up to date with the most relevant information on those project, be sure to click "follow" on the projects, here:

@Yorkdale Village Townhomes, @Local at Fort York Condos, @INDX Condos.

INDX has been a top performing project on BuzzBuzzHome this year, and a super-star in terms of sales.

Could you give reasoning on why you selected these three as "fantastic"? Would love to hear your definition and how you selected these three from all the projects in the City.

Condos can be a good and bad investment but it primarily depends on its location. for example, usually the best time to invest in during the pre selling stage of a condo. I just bought 4 units in this <a href="Thekasara.com">condo in pasig</a> and I hope I will be able to triple the money I've invested by selling two of them and renting out the other two. However, this could also lead to losing a lot of money since its in pre selling the project could lead to a halt due to the company's financial problems and you lose your entire investment

I joined this discussion mainly because we bought our first Condo two years ago in Burlington and it is closing in August this year and don't know whether we can flip it straight away or will have to rent it out. Do we have to wait until the Condo is registered and we have taken posession before we can sell?

buying pre-construction is the purest form of speculation as you are anticipating returns based on leverage, akin to buying stock on margin. If you put 20% deposit and the value of the unit drops 20%, you've suffered 100% loss and vice versa.

Sam, you say you have a few hundred thousand. In some markets, that allows you to buy a duplex or triplex and int Vancouver or Toronto, that's only a 1 bed room condo. 

As for whether to buy condo or freehold, it really depends on how much time and handy you are. Most downtown Toronto homes where I work are 100 year old and landlords are pretty busy keeping up the house whereas the condo management handles all the issues if you invest in condo.     

If you are holding for a longer term, 5-20 years, invest in prime locations where renters are drawn to so you minimise vacancy rates. 

There are many factors to consider.