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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 July 10, 2020

The Definitive Guide to Get out of Debt Fast (and Forever)

The Definitive Guide to Get out of Debt Fast (and Forever)

Debt can feel crushing, like a weight that is always weighing you down. Looking at those numbers, it can feel as if you’ll never get out from under it. However, if you really want to learn how to get out of debt, it is possible with a great deal of focus and self-control.

Getting out of debt isn’t impossible. Like any big goal, all that it takes is an action plan to identify where you are and creating a plan to zero out your debt.

Identifying All of Your Debts

The first part of paying off your debt is getting a complete picture of what you owe. When you have everything written out in front of you, it makes it much easier to create an action plan. Depending on how much you owe, it might also help you realize it’s not as bad you might have originally thought.

Here’s how you can get started identifying your debts:

1. Own Your Debt

Before you start identifying all of your debts, take a moment to process that you have debt but want to get out of it.

Forgive yourself for any past mistakes, missed payments, or overspending. It might be painful to accept how much debt you have at first, but you must own it.

2. Make a Debt Tracker

It’s astonishing how few people ever created a tracker to understand their total debts. Most likely, it comes from not wanting to accept the guilt of having debt, but, if avoided, it can make it nearly impossible to get out of debt.

Open up a new Google or Microsoft Excel sheet and list out all of your debts. Start with the name of the creditor, interest rates, total balance, loan term length (if any), and the minimum amount due each payment. This will include student loans, credit cards, and any other type of debt owed.

3. Get Your Debt Number

Once you’ve made your debt tracker and taken the other steps, identify your total payoff number. This is crucial, as you will have a starting point and a clear goal that you are trying to achieve.

Prioritizing Your Debts

All debt is not created equal. It’s imperative to understand that there are different types of debt.

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1. Understand Bad and Good Debts

Bad debts are usually paying for things you want instead of always need. While there might be some emergencies that max out your credit cards, often times it’s excessive spending[1].

There are three main types of bad debt:

  • Credit Card Debt: The average American household owes over $16,000 in credit card debt!
  • Auto Loan Debt: According to CNBC , the average auto loan in the US is $30,032!
  • Consumer Loan Debt: Consumer loan debt isn’t as common as credit card and auto loan debt, but it’s still considered bad as interest rates are usually between 10-28%.

Good debt is identified as investments in your future. Here are three common types of good debt:

  • Student Loan Debt
  • Mortgage Loan
  • Business Loans

2. Decide Which Debt to Pay off First

Once you know each type of debt and their interest rates, you can begin to pay off debt quickly.

Focus on paying off bad debt first, regardless of if it is a credit card or auto loan. Start by paying off the loan with the highest interest rate first.

If you have several credit cards with different interest rates, you want to focus on the one with a higher APR. You will actually save more money by eliminating the card with the highest interest rate.

3. Don’t Pay the Minimum Amount

Paying the minimum amount digs you into a hole as interest rates will offset your payment. Even a small amount more than the minimum can help you pay off debt much faster.

Removing Obstacles to Pay off Debt Quickly

Creating a debt tracker and prioritizing a plan is simple, but avoiding temptation can be difficult.

1. Set a Reminder to Track Your Debt

“If you can’t measure it you can’t manage it.” -Peter Drucker

It’s so important to track your debt to ensure that you get it paid off quickly. Similar to working out and measuring your results, you need to track your debt constantly. Start with a weekly reminder, where you sign on and log your updated number. Did you increase, decrease, or stay the same?

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Regularly tracking your student loan balance can be incredibly motivating, as well. You will get a huge confidence boost each time you see your total debt amount decreases.

Set weekly and monthly goals so you can have short term wins and keep the momentum going.

2. Hide Your Credit Cards

If your biggest debt is credit cards, you need to eliminate temptation and remove them from your wallet.

Some people have gone to extreme measures by freezing their credit cards. Why? This would create an ice block around your card, which would require you to chip away at it slowly. This will give you time to think if it’s the best idea to buy that thing you’re about to buy.

3. Automate Everything

Willpower can be a huge downfall to paying off your debt. By automating your bills each month, you will ensure that willpower isn’t involved.

4. Plan Ahead

Getting out of debt will require some sacrifices, but with enough planning, you can make it work.

For example, if you know that you have a friend’s birthday or family dinner coming up, plan ahead for the costs. Whether you need to cut back on spending the week before, pick up a side job, or meet them after dinner, do what is needed.

5. Live Cheaply

The only way to get out of debt is to make some sacrifices on your spending habits. Find ways to save money each month so you can apply that amount to your outstanding debts. Here are some ways to save money each month:

  • Live with roommates
  • Cook dinners and prepare lunches for work instead of eating out
  • Cut cable and choose Netflix or Amazon Prime
  • Take public transit or bike to work

Finding the Lowest Interest Rates

The higher your interest rates, the harder (and longer) it will take you to pay off any debt.

If possible, you want to find ways to lower your interest rates to help get out of debt quickly. Here’s how you can get started:

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1. Maintain a High Credit Score

Your credit score will have a large impact on your ability to refinance your loans and receive a lower interest rate. If you have a low credit score, it’s unlikely you will be able to refinance your loans. Use these credit tips to increase and maintain an excellent score:

  • Never miss a payment
  • Don’t exceed 30% of your credit limit
  • Don’t sign up for more than one card at once
  • Limit hard inquires, like auto-loans and new credit cards
  • Monitor frequently with free credit-tracking software

2. Find Balance Transfer Offers

Start by opening a free account on credit.com. Credit.com offers you the chance to open a free account and see what type of balance transfer offers you can receive. Some of your existing credit cards might already have 0% or lower APR balance transfer offers available.

Contact each of your credit card providers to ask about lowering your rate for a one-time balance transfer offer[2].

If you do take advantage of this option, make sure that you use a balance transfer and not a cash advance. Cash advances have a ton of high interest fees (15-25%, depending on your credit card) and will only compound your debt problem.

How to Get Rid of Debt Forever

Setting up a plan, removing temptations, and getting the lowest interest rates is the first step to get out of debt.

1. Keep Monitoring and Adjusting

Once you have a plan, don’t get comfortable. Track your debt payoff plan and make the necessary adjustments when needed.

Monitor your credit scores with a free site like CreditKarma. The higher your credit score climbs, the more likely you will be to secure a new, lower-interest loan.

2. Earn More Money

There are only so many ways to save money. Instead of clipping another coupon or making sacrifices for your morning coffee, find ways to earn more money!

Think about it…it is much easier to find ways to earn an extra $1,000 per month than find $1,000 to cut from your budget.

Here are some examples of ways to earn more money:

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Talk to Your Boss

Have a conversation with your boss about current salary and/or commission rates. If you’re not satisfied or want a change, don’t be afraid to look around at other positions. Some of them might even have a student loan debt reimbursement plan!

Start a Side Hustle

This could be coaching students on the weekends, driving for Uber, or taking paid online surveys. There are tons of ways to make money outside your 9-5. Now that you have a clear plan to pay off your debts, you’ll be more motivated than ever to figure out creative new ways to earn money.

Build an Online Business

There are so many websites and blogs that earn money from ads, affiliates, and other online products. Find your niche and get started.

3. Celebrate Your Wins

As you progress in your debt payoff journey, don’t forget to celebrate your wins. You need to always reward yourself for the hard work and discipline that is required to get out of debt.

While you shouldn’t celebrate so big that it increases debt, make sure to factor in little rewards to keep you motivated.

4. Set New Financial Goals

Eventually, with a plan and these steps, you can rid yourself of your debt. Once you do, make sure to celebrate your monumental achievement, but don’t stop there.

Now, you can focus on acquiring wealth and increasing your net worth. Set new financial goals so you have a new target to aim toward. Here’s how to set financial goals and actually meet them.

These could be anything now that you are debt free! Think about where you want to travel, buying your first home, or saving for your future retirement. Just like before, make sure that your goals are specific, measurable, and achievable.

Conclusion

Congrats, you can now set a plan in motion to finally pay off your debt quickly (and hopefully forever)!

Remember, if you want to get out of debt quickly, it’s not always easy. Just like any big goal, there will be sacrifices, challenges, and problems to overcome.

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Featured photo credit: Pepi Stojanovski via unsplash.com

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