Acquiring preconstruction real estate is an exceptionally profitable investment tactic. Buying a property before it is built can provide you with great financial advantages and the possibility to customize your future home or investment. In this article, we will show you why preconstruction could be the next big move in your real estate portfolio.
ADVANTAGES OF BUYING PRECONSTRUCTION
1. FINANCIAL ADVANTAGES
Preconstruction can offer excellent financial benefits. The costs of preconstruction properties are usually lower than those of already built properties in the real estate market. Additionally, the property value can increase significantly as construction progresses, which can generate an attractive return on your investment.
2. CUSTOMIZATION
One of the biggest strengths of buying a preconstruction property is the ability to customize it. You have the option to influence the design and finishes of your new home, allowing you to create a space that perfectly fits your tastes and needs.
3. PAYMENT IN STAGES
The payment process in preconstruction is done in stages. First, you make an initial deposit to reserve the property, and the balance is paid during the construction period or at the end of it, which can be beneficial for your cash flow.
4. NEW PROPERTIES
Preconstruction properties are completely new and usually come with builder warranties. This can alleviate your concerns about maintenance and repairs during the first years of ownership.
STEPS TO ACQUIRE A PRECONSTRUCTION PROPERTY
If you are thinking about investing in preconstruction, here are the essential steps you should follow:
1. PRELIMINARY RESEARCH
The first step in buying a preconstruction property is to conduct thorough research. You should look for information about the real estate market in general and preconstruction properties in particular. Look for projects in areas that interest you and evaluate their characteristics.
2. SELECT A TRUSTWORTHY DEVELOPER
It is essential to work with a reliable and reputable real estate developer. Research their previous projects, read reviews from other buyers, and ensure they have a solid track record of quality and timely deliveries.
3. HIRE A REAL ESTATE AGENT
A real estate agent can be very helpful in this process. They can advise you on available projects, help you understand the contracts, and facilitate negotiations with the developers. Make sure to hire an agent with experience in preconstruction.
4. VISIT THE PROJECT SITE
If possible, visit the site where the project will be carried out. This will allow you to get a sense of the neighborhood and how life will be there once the construction is completed.
5. REVIEW THE PROPERTY PLAN
Before committing to buy, you should have the opportunity to review the property plans. This will give you a clear idea of what the space will look like once it is finished.
6. NEGOTIATE THE CONTRACT
Once you have decided to buy, the next step is to negotiate the contract. You may want to hire a lawyer to help you with this step, as preconstruction contracts can be complex.
7. MAKE THE INITIAL DEPOSIT
The next step is to make the initial deposit, which is usually a percentage of the total purchase price. This payment secures your place in the project.
8. WAIT FOR THE CONSTRUCTION TO BE COMPLETED
After making the initial deposit, the next step is to wait for the construction to be completed. During this time, you should receive regular updates from the developer on the progress of the project.
9. CLOSE THE PROPERTY PURCHASE
Once the construction is finished, you will need to complete the property purchase. This involves paying the remaining purchase price and signing the necessary documents to take possession of the property.
CONCLUSION
Buying preconstruction real estate can be an excellent investment tactic. It offers economic advantages, the possibility to customize your property, staged payments, and brand-new properties. However, it is also crucial to follow the correct steps when investing in preconstruction to ensure a satisfactory and profitable experience.
FREQUENTLY ASKED QUESTIONS
- Is it mandatory to hire a real estate agent to acquire a preconstruction property? It is not mandatory, but it is highly recommended. An expert real estate agent in preconstruction can guide you through the process, help you select the best project, negotiate on your behalf, and assist with the paperwork.
- Is it possible to negotiate the sale price of a preconstruction property? Generally, preconstruction property prices are fixed, determined by the developer. However, in certain circumstances, you might have some room to negotiate, especially regarding upgrades or improvements.
- How long can I expect until the completion of a preconstruction property? The construction time can vary depending on the project and the developer. Typically, it can range from 2 to 4 years. It is important to consider this factor to plan your investment.
- What happens if the completion of the construction is delayed? Construction delays are a real possibility when buying preconstruction. Contracts usually include clauses that allow for certain delays. If the delay is excessive, you might be able to receive compensation, but this will depend on the specific terms of the contract.
- What happens if I decide not to proceed with the purchase after making the initial deposit? If you decide to withdraw from the purchase after making the initial deposit, you are likely to lose part or all of this money. The specific terms will be detailed in your contract, so it is crucial to understand them before signing.
Enrique Vicente Urdaneta
Real Estate Advisor | eXp Realty | EVU Luxury Homes
305.209.6418
www.instagram.com/evuluxuryhomes
Disclaimer: The information presented in this article is intended to provide a general understanding of the topic. However, please note that I am a real estate agent, not a lawyer, accountant, tax, or financial advisor. This content should not be taken as legal, tax, accounting, or financial advice. The laws and regulations related to this topic can be complex and may change or expand in the future. Therefore, it is crucial to consult with a qualified professional, such as a specialized financial or tax advisor, before making any decision based on this information. As a real estate agent, I can provide various options and professional guidance related to the real estate aspects of your investment strategy, and for matters related to tax implications, legal issues, and financial planning, please consult with the appropriate professionals, which whom I have allies I can refer.
