Benefits of Buying Pre-Construction Condos

It seems that living in condominiums have become a way of life particularly for people who work in downtown offices of large cities. It has become so popular that some residential condominiums are nearly sold out even though they are still in the development phase. This is because even before the actual development of the building has started, a lot of pre-construction sales have already happened.

Buying those condos has emerged as one of the lucrative but somewhat risky, investments anyone can have. There are a lot of benefits when you buy them and one of them is the amount of money which you have to pay in contrast with an already completed unit.

Prices for the condos are but just a fraction of their actual value when completed. Once the real estate developer is finished constructing the condominium, the amount that was pegged during pre-construction could easily double and you could earn a tidy profit right away if you sold the unit that you bought upon its completion.

The other benefit to this type of sales is that you can actually alter the interior design of the unit you bought. This means that you can actually have your own design incorporated in the interior of your residential condo unit. You can change the wall paneling, flooring, and can even reposition some fixtures like the bathtub if you bought the unit during pre-construction phase.

Though there may be a lot of benefits that can be gained in choosing to buy a pre-construction condo unit, this is also a risky investment because you would have no way of predicting what will happen in the future. The biggest downside to this kind of investment is the delay that may happen during the construction phase. You may find yourself waiting for several years before you can actually live in the condo unit that you bought.

Pre-construction condos can be good investments but before you buy one of them, you should first study the project carefully to avoid any regrets. Another thing that you must consider is that you got to have a place to stay while waiting for your condo unit to be finished because you will be looking at more than two years for the construction to be completed.

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Buying Homes Pre-Construction

Many people hear about buying homes in the pre-construction phase of development and having the home value skyrocket in the first few years. The stories usually involve someone "getting in" during the early phases of development when the builders offer good incentives and competitive pricing. These homes can be great investments, but deals like these are harder to find now than they were even five years ago. So, talk to your real estate agent about pre-construction homes (and investing in the Charleston area in general) if this is something you are interested in.

A lot of our clients have opted to buy homes pre-construction because they need time to sell their current home. Building a new home in Charleston usually takes anywhere from four to nine months. We have found that new construction is the best way for people to go ahead and buy a home (reserving a price in the market) but also postpone their closing date (giving them time to sell their house). Along the same lines, most builders only require you to put down a small amount (anywhere from $1,000-15,000 depending on price of house) upfront. After you make this payment, you don't usually pay any more until the house is built and you close on it. So, if you are still making mortgage payments on your current home, you don't have to worry about making double mortgage payments until the time that your house sells. Also, if you are an investor, it would be beneficial for you to try to not close for a while so that you can capture the appreciation of the home.

Another benefit of buying homes pre-construction is that you know your home will be low maintenance. Builders are required by law to give specific minimum warranties to ensure that you don't face any major problems during the first few years of living in your new home. One of the warranties is a minimum of 1-year "bumper to bumper" warranty which ensures that everything in the home is covered by the builder. There is also a 2-year warranty that covers all systems (electrical, plumbing, heating and air conditioning, etc.) in the home. Another warranty is the 10-year structural warranty which covers foundation and other structural problems.

An obvious benefit of buying pre-construction homes is that you get to choose many features in your home. Depending on the progress of construction, you can often choose flooring, cabinetry, light and plumbing fixtures, etc. You can either go with the upgrades, or you can keep the standard features in order to keep costs down. If you are buying a home during the early phases of development, you can usually choose which floor plan you want to use and even which lot you want to build on.

Although there are plenty of benefits of buying new homes, there are also some drawbacks. New construction homes sometimes sit on smaller-sized lots compared to older homes. Older lot sizes in Charleston are typically about 1/3 of an acre, while newer lots are generally ¼ of an acre. These averages vary according to area, and you'll find larger lots in general in areas that are farther out in Charleston. Another drawback of pre-construction homes is that you don't have a definite closing date. Due to weather and building permits, the builders don't always close on time. A third drawback is that people can't always walk through the house and see how it looks before you buy. New construction neighborhoods almost always have a model home to show you examples of finishings and upgrades. Although these homes have different layouts and features, they can still give you an idea of the quality of work you can expect from the builder.

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Ready For Occupancy VS Pre-Construction Phase - When Should You Buy?

Searching for the right home or housing option is an exciting and sometimes irritating task. As a lot of choices are present in the property market, many factors influence a potential home owner's choices, and these range from homes that are fully or partly furnished, ready for occupancy, or in the pre-construction stages.

Some home buyers refer purchasing homes ready for occupancy, as they would like to better view the end result of construction, and assess if the completed home fits their preferences and tastes. Some would also prefer buying pre-construction homes, as many developers who offer these deals give special discounts, rebates or other privileges to those who buy in advance.

What Are Pre-construction Real Estate Offerings?

Pre-construction real estate investment refers to the art of buying properties, usually condos or townhouses, at a very early stage of the construction process. Profit is acquired from then selling it months or sometimes even years later at a substantial difference.

Ready for Occupancy homes are generally offered to buyers on a completed phase, and buyers purchase the home based on the prevailing rates or prices set by the developer, though the mortgage options could be arranged to suit a home buyer's payment preferences.

Why Do Individuals Invest In Pre-construction Real Estate?

Investing in pre-construction real estate has been present for decades, but only until recently has it been getting this much hype. This is quite reflective in the Orlando, Tampa, Miami housing markets and other resort areas.

There are many theories that will explain why the investment real estate market has seen so much growth. The truth is, several factors fuel this explosive market. The first major factor is that the US dollar is currently weak. This is prompting foreign investors to buy US land as an investment. In turn, these foreign investors are not only investing in the real estate but in the currency market as well.

The second factor is the high fluctuation in the stock market. Stock values vary more frequently than ever before. This compels the average stock market investor to become more involved in their investing strategies to turn a profit. Most individuals do not have time for hands-on investing, and this results in bringing investors to pre-construction deals because it is one of the most hands-off forms of investment.

Many View Pre-construction Investing As A Good Option

Many consider investing in pre-construction real estate as a very profitable investment option. Not only is real estate in areas like Orlando, Tampa, Miami, and Las Vegas are booming, but so are pre-construction developments in those areas as well. When a developer plans to build a resort, they first need to come up with the capital to do so.

With banks currently quite reluctant to lend many for all these projects developers are looking to pre-construction investors. Pre-construction investors are people that purchase the developer's projects before they are even started in order to give the developer seed money for the development to get off the ground

But Why Isn't Everyone Getting Into Pre-construction Deals?

Some analysts are asking, "if there is so a lot of money in pre-construction real estate, why isn't everyone doing it?" This answer they say, is quite simple; as there are not many pre-construction opportunities currently, and when the opportunities do arise, they are sold out in days, if not hours.

Also, serious investors are going after available pre-construction opportunities so quickly, that home builders are saying that they don't have to advertise to sell their property. It is not uncommon for developers to release all of the project's pre-construction units at once. In the time span of one workday, it is not uncommon to see all available units of a pre-construction offering reserved.

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