Buying a Pre-construction condo on a higher floor – Is it worth it?

Pre construction condo in Toronto

We can all agree that the higher you are in a condo, the more eye-catching the view will be but the important question here is; does it worth the money? Well, we are going to answer this question.

It is pretty obvious that if you want to live on a higher floor of a condo, you should deal with a greater price exceedingly over $1000 for floor premiums. Each floor of a condo comes with a similar unit design (if not the same exact design). The only notable difference would be the view you could have regarding the floor you’re on. In general, if you live on a higher floor, you can have access to a pretty spectacular view over the city, but there is a price to pay for renters and buyers; the higher the floor, the more expensive the unit.

There has been a long raging debate between high floor condos and low floor condos. Real estate professionals adhere to a few rules when it comes to this comparison. For example, rents are pretty higher on a higher floor and everyone knows that buyers and investors are more interested in purchasing higher units. This is also notable that the higher the unit, the larger it might be.

While purchasing a pre construction condos Toronto area like Mississauga for example, there are several considerations that need to be taken into account such as amenities, location and other important questions like whether you can have a pet in that neighbourhood or not. The majority of real estate professionals would recommend buying a unit on a higher floor, but if this is not an option for you because you can’t afford it, a lower-floor condo in a good location can be equally valuable. so, if you think about buying a Pre construction homes in Toronto or investing in a unit, you should consider the floor it is on as much as anything else.

Several studies have been conducted in the Toronto area to determine if there are any other benefits to living in a higher-floor condo than just having a gorgeous view, which is very important on its own. Following the analysis of comparing so many high condos, it seems the answer to that question is a big fat YES; there are several advantages to living on a higher floor condo; a great view is only one of the many. The resale value for example. When purchasing a condo, people tend to have a view over the city and other buildings rather than having their morning coffee looking out on another building across their window. So, it is pretty easier to market a higher unit, especially in a premium area.

Even though this may look awesome, there is a downside as well; not everyone can afford to live on a higher-floor condo in a premium neighbourhood so accordingly an investor may need to wait a little bit more to find a buyer/renter for their unit. But if they do (which they will, no doubt about that), they can sell it for a beautiful price.

Another important factor to consider here is the cap rate. Depending on the current market value of a condo being located in a certain area, the cap rate will determine how much money will be generated by the operating income. So essentially, a property with a high return income can yield a higher cap rate which means investing in higher floor units can result in a higher profit for the investors as the cap rate increases.

Now, these factors are way more important when investors come upon condos that give almost the same view no matter how up the unit is located. Usually in a condo the higher the floor is, it offers a better more interesting view, but considering a building that has a view not that different from a high-level unit, than it has on its lower floors, the investor can still make a lot of money since the market value increases due to the view that the stock offers.

And finally, there are advantages and disadvantages to investing in a lower floor unit as well. As lower-floor condos tend to be less expensive than higher units, the investor can actually make money sooner than those investing on higher floors. Higher condo investment, on the other hand, can yield more long-term profits.

So back to our first question; Is it more valuable to buy a condominium on a higher floor? If you have long-term considerations the answer would be YES! A high-floor condo can generate more money and can definitely offer a fantastic view as well. However, if you are interested in a quick sell-quick profit, then the higher unit would not be the case for you; value is very subjective.

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