Purchasing real estate in Toronto can be an excellent investment, whether you are buying to let, or for personal or professional use. However, if you make a mistake, you could end up losing a lot of money unnecessarily. There are common pitfalls to be aware of before you commit to a property, to avoid making a decision you will come to regret deeply. Read on for the five most common mistakes to avoid.
1. Buying for the short term
Many buyers purchase a property with the intent to sell and upgrade in around 5-6 years when their requirements and financial situation have changed.
However, there are many costs involved in moving homes in Toronto, such as land transfer tax to buy your new home, commission and HST to sell your current home, moving costs and new furniture. Overall, you could end up spending between $50,000 and $100,000 in moving expenses, so it’s advisable to think long term to buy a few extra years in your property and save you money long term.
2. Not considering factors that will affect the future resale value
While purchasing a property is often a fantastic investment, this shouldn't just be assumed. Many factors affecting the future resale value won't be apparent immediately; however, some will be. For example, consider the location and avoid buying a property next to hydro lines, gas stations or subway stations.
Avoid buying the most expensive property on the street as the appreciation will be dragged down by the properties around it, and it will be difficult to add any value to it in future.
3. Being too picky
While it’s important to find a property that you’re happy with, the chances of finding one which fits every item on your wish list at the right price are slim. Set a budget and stick to it, and decide what you will and won't compromise on.
If you put off buying a property because you are searching for perfection, the market may change, and you may end up eventually spending much more, or you could end up paying a lot more than planned on rent as you continue your search.
4. Falling for the staging
Sellers will enhance the look of a property with staging, minor upgrades, and cosmetic fixes to make it look better than it is and generate higher offers. Try to look past the staging and see the property for what it is. You could also consider saving some money by looking for a property you can add value to with renovations in the future.
5. Making a low or conditional offer on a property which will attract several offers
Toronto’s real estate market can be highly competitive, and when there are multiple interested buyers, properties can sell for much more than the list price.
You will be kept up to date with how many buyers are interested in a property, and if there are several, then your chances of securing it with a low or conditional offer are incredibly slim.