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How To Buy A Pre-Construction Townhome

How To Buy A Pre-Construction Townhome

There are benefits of purchasing a pre-construction townhome. It’s an interesting way to be part of a project, like a totally new condo in a residential district, or have the initial claim on the penthouse in the most recent building.  Most times you also have the option of capitalizing on a couple of discounted early phase pricing.

Should I Purchase a Pre-Construction Townhome?

Is the real estate business right for me? This thought may cross your mind a few times. It is sometimes hard to reckon how a Townhome will look just staring at the blueprint. Not to worry, your developer will offer you a computer simulation model that is close to the real thing to aid your decision making. By implication, you won’t be purchasing blindly.

There are strings of benefits you gain when you buy a pre-construction home. The most appealing is the low price you can access when purchasing this property. Often, these pre-construction properties are sold in “buying phases”.  The value is increased after a particular amount of units have been sold. In certain instances, it could be after a 25 percent sale while for properties in high demand, the value may be raised after only 10 percent of the units have been sold

You may ask yourself, how do I buy an apartment that I have neither seen, touched nor even walked through?  Or how do I know what the views from a particular floor would be like?

Let’s guide you:

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1. Let the offering plan guide you

The offering plan is your de facto guide when purchasing. It contains all you need, from the selected appliances, opinions on taxes that tax lawyers have deemed as best after assessment of the completed building by the city. It will also have a “special risks” section, which will include things like whether or not the developer has the right to rent any unsold units.

Be informed that the developer is only bound by law to render the contents within the offering plan, not the content of the brochure or what’s in the offering.

2. Choose an experienced developer

Carefully study the track record and the reputation of the developer. A developer having a strong customer/client base means you will not be disappointed. The presence of issues or other forms of problems may require you to verify before you purchase.

Checking out discussion forums using Google about the developer is not a bad idea, any estate attorney with years of experience can also make recommendations,   on whom or who not to deal with.

Allowing your broker advice you is the best way of finding an experienced developer. Get the counsel of an informed broker on antecedent of the developer, level of past developments, resale history, information on his success in past construction and development.

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3. Make sure you secure Phase 1 pricing

Pre-construction apartments are sold in stages of pricing, buying in the first phase, helps you save 5 to 10 percent off the final listing price. However, the best units are sold last because prices are highest then.

4. Confirm the quality of the materials

Contained in the offering plan are the materials, you must be meticulous when inquiring about them. At times engineered floor is used to mask a light sheet of oak floor. In this way, you have engineered floors in place of the oak floor in contrast to what was originally assured in the offering plan. You will need to get precise details on the type of floor by asking the sponsor, for instance, the percentage of oak used on the floor.

Construction variations seem normal to sponsors and so they are allowed to make changes in everything, from materials to ceiling height contained in the offering plan. For this reason, it is advisable for your attorney to inquire about the standards for variations for the construction company and get details of the contract.

Though sponsors do not like people inspecting the apartment under construction but you should try to negotiate this. It will be less difficult to get them to allow you inspect the apartment if you are purchasing a signature apartment.

Importance of Purchasing Pre-Construction

You can get involved in real estate in numerous ways, however, pre-construction real estate happens to be the fastest growing with some of the quickest and highest returns.

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Pre-construction real estate should be given serious consideration because pre-construction condominiums have the best pre-construction real estate on the market presently. They are found everywhere, but some locations are going through a preconstruction real estate increase because of increased demand for accommodation in these areas.

Lower starting prices are the primary reason why investing pre-construction estate is a sure bet. Buying at the commencement of a sales launch is the best because the builder presents the lowest prices at this time. This is the best time to make appreciable returns on investment.

When you buy early, you purchase a home with better future value at the current price; you also have freedom to choose from different options. There is a wide selection of floor plans to choose from, so you can make changes to your own unit. This makes your home unique because it stands out of the crowd.

Because people demand condos in hot locations, you won’t wait long to see a return on your investment compared to if you bought a home or property before construction, which yields faster returns. Selling or renting a never lived in condominium or home is much easier to sell than an older one.

The opportunity of instant equity provides the best perk of investing into pre-construction real estate. Meaning you don’t wait for investment return to come up in years, it does so right away as soon as you sign the agreement of purchase & sale.

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Numerous incentives come with a pre-construction real estate investment market. Developers offer extras because they want to retain investors or woo investors initially. These benefits often increase the worth of the real estate that you are looking to invest in immensely. Examples of these benefits include upgrades, appliances, furnish or direct credits off the purchase price. Every benefit increases the worth of the property.

After making a purchase and investing now comes the waiting game. It will take years to close out, moreover construction setbacks is fairly common. The condo’s worth will still, appreciate at a higher than average rate, giving you a handsome income on your 15-20% down payment.

Presently, preconstruction condos are the in-thing in the real estate market. If you have been thinking of investing in a pre-construction condo or home, then feel free to contact us. We provide free research to help you make that decision, define your investment goals and bring you to the pre-construction project of you dream.

Featured photo credit: Pre-construction Home via pre-constructionhomes.com

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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