How to Purchase a Presale Condo in Vancouver 1 | Advantages for Investors

Why do Investors Buy Presale Condos in Vancouver?

Welcome to How to Buy a Presale Condo in Vancouver 1. This is the first in a series of videos that will explain in detail the process of buying a pre-construction or off plan property in Vancouver, British Columbia, Canada.

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Pre Sale Condos are not for everyone. But for many Buyers particularly investors, Presale Condominiums are a great option because of the advantages of this type of property offers.

What are Some the Advantages to Buying Pre Sale Condos for Investors?

  • Low Hassle Investment with Potential for Capital Appreciation – Pre-Sales allow investors potential capital appreciation in a rising market prior to Completion without the hassle of tenants, the cost of property taxes and maintenance fees. Presales can often be sold prior to Completion by the original Buyer of the presale for a profit (Sometimes not at a profit) and this is referred to as an assignment of contract
  • Warranty Protection – When the property completes the investor gets a property with a full 2/5/10 Warranty which in most cases means low cost and low hassle ownership during the life of the warranty.
  • Leverage – An investor may be able to purchase a Presale by putting down a deposit of 5-10%. Should the property increase in value before Completion, an investor could see a significant return on the deposit money invested. Also, in a rising market an investor may be able to buy a presale a with a 5% or 10% deposit and then Complete on the property with over 20% in equity without putting up any more money up due to the increased value of the property at Completion. This would allow the investor to avoid costly CMHC high ratio insurance premiums required for properties purchased with less than a 20% downpayment.
  • Low Cost of Ownership – New condos built by good Developers in most cases will not require a lot costly and time consuming repairs or maintenance on the part of an owner/investor as compared to an older building.
  • Popularity with Tenants – Newer buildings tend to be popular with tenants for a lot of the same reasons they’re popular with investors, newness, no need for repairs or troublesome and costly maintenance as well as the modern conveniences that newer building tend to come with such as Gyms, Saunas, Hot Tubs, Concierge, Swimming Pools, etc.
  • Newer Suites Often Get Higher Rent – Brand new is popular and very often prospective tenants are willing to pay a premium to rent a newer suite over an older suite.

Stay tuned for Episode 2 of How to Purchase a Presale Condo in Vancouver were we discuss the advantages of buying Presales for Owner Occupiers.

Looking for advice on how to Sell a Property in Vancouver? Check out these great videos on How to Sell an Apartment in Vancouver with Video!

Buying? Questions? Have a look at these informative videos on How to Buy a Condominium in Vancouver! with Video!

I Strongly ENCOURAGE Questions and Comments in the field below!!


  Comments: 24

  1. Thanks for the videos. When is episode 3 coming out? Hopefully soon!

    • Hi Nick,

      Good to hear from you and thank you very much for leaving a comment!!

      I hope to have it up in January, but stay tuned as I will have other blog posts up on related topics over the next few days!

      How did you hear about my video blog?

  2. Hi Nick,

    Good to hear from you and thank you for your comments and feedback!

    I’ve been putting quite a bit of effort in trying to develop interesting and useful content, I hope you like it!

    Are you looking to buy a presale in Vancouver?

    Looking forward to hearing from you!

  3. Hello Mike,

    a couple of questions for you, but first, thank you for the videos.

    1- you mentioned that if I want to resale before possession date I need the builder’s approval. Is this often a problem? Do I need to negotiate this before purchasing?

    2- In case the value goes down and the investor has to sale for some reason, they “Simply” take the hit?

    Thank you


  4. Hi Chris,

    Good to hear from you.

    Thank you for taking the time to comment and the nice words about the videos!

    1) If you want to sell your presale condo (technically an assignment of contract) before it completes, it is CRITICAL that you make sure the Developer will allow it BEFORE you buy the presale.

    Once you have bought the presale (after the 7 day rescission period), you are bound by the contract and if it says you can’t assign the presale in the contract, thats the way it is.

    A Developer may be negotiable on allowing assignments (upon signing the contract, but rarely after), but this depends on the Developer and depends on the market conditions at the time.

    In most cases the Developer will allow you to assign the suite only after they have sold all of their presales. This means that if the Developer doesn’t sell all their presales before Completion, you can’t assign your presale even though the contract says you can.

    A presale contract for a condo essentially fixes the present price of a condo that will be delivered in future.

    If the condo is worth more when it completes in future, the Buyer gets the profit or gain in value.

    If the condo is worth less when it completes in future, the Buyer must Complete on the condo or they can assign the condo at a loss. (Which happened during the 2008-2009 Financial Crisis)

    The thing to remember with a presale is that its a legally binding contract.

    If you buy a presale, you must be prepared to Complete on the property, even if the market value of the property is lower than what was originally paid for it. If you choose not to Complete on a presale, it can get painful and expensive quickly. Some people chose not to complete on their presale condos completing during the Financial Crisis of 2008-2009 and Developers sued these people. Not fun.

    Again, I appreciate your questions. I will be discussing the negatives or potential downsides of presale condos in the next episode.

    Are there any other questions you would like me to address?

    Looking forward to hearing from you!

  5. Nice Job on the videos!

    I was wondering, if say for example someone purchases a condo on a presale, but upon completion of the property, they say, lose their job or something making it difficult for them to obtain the financing possible for purchasing the entire unit outright. What happens then? What options are available?


  6. Hi John,

    Good to hear from you and thank you for the kind words and for taking the time to comment!

    A contract for a presale condo in Vancouver is like any other contract.

    If a buyer does not rescind the contract before the end of the rescission period or removes all their subject conditions, the buyer must complete on the property.

    It does not matter if a buyer loses their job, or cannot get a mortgage, or decides they no longer want the property, the Buyer must complete on their presale condo.

    Not completing on a presale condo in Vancouver can get very messy very quickly.

    I know of several situations where a Developer brought legal action against buyers who did not complete and it was very messy, painful, and expensive for the buyers. Many of these buyers lost their deposits and in some cases worse.

    If a buyer forsees they cannot or may not be able to complete on a presale condo they have bought in the past, I would strongly urge them to see a lawyer immediately with experience in these matters.

    I say this for two reasons.

    First, if the Developer decides to start legal action to force the buyer to complete, having a qualified and experienced lawyer will come in handy for the buyer to protect their interests.

    Second, If the buyer decides they want to attempt to re-negotiate or dispute points in the contract (which I have heard is rarely successful) again a qualified and experienced lawyer will come in handy ESPECIALLY since 99% of presale contracts are written by the Developers lawyers to favour the Developer in the event of a dispute.

    Lawyers aren’t cheap and getting involved in legal disputes with a Developer can get very expensive very quickly.

    I suggest that if you are thinking of buying a presale condo in Vancouver, you need to be 110% certain that you can complete on the property.

    What are your thoughts?

    • Thanks for your rapid and very comprehensive response Mike. That is very sound advice-the legal side can get very messy and add a lot more stress than desired.


  7. Good to hear from you!

    Thanks John!

  8. Hi Mike.
    Thanks for these very instructive videos. I have a question regarding delays (i.e. the completion date of the condo is delayed for any given reason): what are the ways a buyer can protect himself against them and their consequences.

    Thanks Mike,


    • Hi Olivier,

      Good to hear from you and thank you for taking the time to comment!

      It’s very difficult to predict if the completion of a presale condo will be delayed.

      The contract to purchase the property is essentially an agreement for the Developer to supply a condo by a certain date in exchange for the buyer’s money.

      If the Developer cannot complete the project, very often (depending on the contract) the Buyer can walk and get their deposit back.

      This is because typically, a Developers contract to purchase the presale condo will include a “drop dead date”.

      A drop dead date (not sure if this is the correct terminology) is a date beyond which the contract to purchase the property becomes void or voidable at the Buyers discretion (Depends on how it’s written).

      For example: A buyer agrees to buy a presale condo to complete before May 31st, 2015 and that is set as the drop dead date.

      The condo project is delayed for unforeseen reasons and is not complete on May 31st, 2015. At that point the Buyer may get the right to void the contract or it may automatically be void.
      The Buyer will be able to get their deposit back (as Presale Deposits are held in trust accounts) and may be able to get interest depending on how the purchase contract was written.

      One thing to note – If you’re buying a presale condo in Vancouver, it is very important to have a lawyer review the contract to purchase the condo, especially if you have concerns like you mentioned above.

      What are your thoughts?

      I’d love to hear more form you in a comment below!

  9. Hello Mike,

    Many thanks for your thorough insight, and for taking the time to write it. I agree with the videos posted, I think pre-sales condos are great opportunities for investors (like me) as well as occupiers.
    I will contact you if there is any development coming to Vancouver and within my price range (I am now looking to buy in the suburbs).

    Thanks Mike, have a great day.


    • Hi Olivier,

      Good to hear from you and thanks for the kind words!

      Please let me know if there is anything I can do to help you in your search and I look forward to more of your comments!

      Speak soon!

  10. Hi Mike,
    Just reviewed your videos as I am researching to purchase a pre sale condo for investment. Can you tell me if you know anything about The Tsawwassen Springs development currently underway? I’m thinking of purchasing in their 3rd condo building scheduled to complete in 2017.

  11. Hi Mike,
    I watched your video and like it very much !
    I bought a pre constraction condo in Vancouver East side few years ago. It hasn’t completed but might next year.
    My question is for you. When is best chance for sale the condo,before completion or after completion?
    Thank you ! Mike

    • Hi Serena,

      Good to hear from you.

      We can definitely help you with this.

      Give me a call at 604-763-3136 and we can help you with this.


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