What You Need to Know Before Investing in a Pre-Construction Property

Are you thinking about investing in real estate to create passive income? You’re not alone. More Canadians than ever are exploring property investment as a long-term wealth-building strategy. One path gaining momentum is investing in pre-construction properties.

At Regalway Homes, we understand that real estate can feel overwhelming when you’re just getting started. That’s why we work with new and experienced investors in the Greater Toronto Area to help them take smart, confident steps forward. Whether you’re buying your first investment condo or growing your portfolio, here’s what you need to know before putting your money into a pre-construction opportunity.

What is Pre-Construction Investment?

Investing in a pre-construction property means purchasing a home or condo before it’s built. You’re often buying based on plans and renderings rather than a finished structure. Typically, this type of purchase happens in phases. You pay a deposit up front and then incremental payments until the closing date, which might be years away.

The appeal? You’re locking in today’s price with the expectation that the value will increase by the time the project is complete. This strategy can be especially attractive in fast-growing markets like the Greater Toronto Area.

The Advantages of Pre-Construction

There are some very real benefits to this investment strategy. One of the biggest is affordability. According to the Canada Mortgage and Housing Corporation (CMHC), new home construction has been steadily increasing in major Canadian cities, driven by a demand for more affordable and efficient housing solutions (CMHC, 2024).

Another key benefit is flexibility. You don’t need to qualify for a mortgage immediately, which can give you time to plan your financing. Plus, you often have the ability to customize elements of the property and choose finishes that appeal to future tenants or buyers.

The Risks to Consider

Like any investment, pre-construction comes with some risks. Delays are not uncommon. According to a 2024 report by the Financial Consumer Agency of Canada (FCAC), construction delays have impacted more than 30% of residential projects over the last two years. These delays can affect your financing plans, rental income timeline, and overall return on investment.

You’ll also want to be mindful of market fluctuations. While real estate has generally trended upward, there are periods of correction. Buying pre-construction means you’re betting that the value of the property will increase by the time it’s built. Make sure your investment aligns with your risk tolerance and financial goals.

Financing and Fees: Know What You're Getting Into

Many investors are surprised to learn how different pre-construction financing can be. You’ll typically need to make a deposit of 15 to 20 percent, paid in stages. These are not small amounts, and they’re not usually refundable.

Also, be aware of the added costs. According to a 2023 article by The Globe and Mail, buyers of pre-construction condos in Ontario should prepare for additional fees like development charges, occupancy fees, and HST on the final sale price. These can add up to tens of thousands of dollars, so working with a team that understands the details is essential.

How Regalway Homes Helps Investors Succeed

At Regalway Homes, we do more than just introduce you to properties. We walk you through the entire investment process. From identifying a promising pre-construction opportunity to negotiating terms and partnering with lenders and lawyers, our team is here to support you every step of the way.

We’ve helped dozens of first-time investors start building generational wealth. We also work with experienced investors to grow their portfolios by coaching them on strategy, project timelines, and exit plans. Our approach is transparent, data-informed, and built around your goals.

We know how to navigate the Greater Toronto Area market because we live and work here. And we’ve built partnerships with some of the most respected builders, financial institutions, and legal advisors in the region.

Is Now the Right Time to Invest?

Despite the headlines, the demand for housing in Ontario remains high. Immigration levels continue to drive population growth, and the federal government has committed to building more homes to ease the housing shortage. CMHC projects that the GTA alone will need over 700,000 additional homes by 2030 to meet demand (CMHC, 2023).

This sustained demand, combined with current pricing opportunities, makes pre-construction investing a compelling option for those looking to build passive income streams. But timing is only one factor. Your success will depend on making informed choices and working with the right partners.

Ready to Explore Pre-Construction Opportunities?

Whether you’re dreaming of a future with more flexibility or actively planning for retirement, real estate can be a powerful part of your financial journey. And with the right coaching and support, you don’t have to figure it all out alone.

At Regalway Homes, we believe anyone can succeed in real estate investment with the right guidance. Visit www.regalwayhomes.com to learn more or book a free consultation with our investment team. Your path to financial freedom begins now.

Sources

• Canada Mortgage and Housing Corporation. (2024). “Housing Market Outlook: Spring 2024.” https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/market-reports/housing-market-outlook/2024/housing-market-outlook-spring-2024-en.pdf 

• Financial Consumer Agency of Canada. (2024). “Understanding Delays in Pre-Construction Homes.” https://www.canada.ca/en/financial-consumer-agency.html

• The Globe and Mail. (2025). “Desperate preconstruction homebuyers try to get out of their contracts.” https://www.theglobeandmail.com/real-estate