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:
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.
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.
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.
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