Acquiring a new property is a primary goal for many people. Investing in pre-construction phase has recently become an increasingly more popular trend.
Investing before construction allows you to make an initial down-payment expecting to receivie the property at a later date. Using scaled models and floor plans of the property, the buyer can envision future development. There are many factors to consider when making such a significant investment decision.
Following are a few of the advantages of investing in pre-construction property:
Low initial investment
Just like buying a built home, you may expect to make a down-payment of 25% – 35% of the total price. However, with a pre-construction property, you could probably make that down-payment through monthly installments throughout the construction time. Thus reduces the need to have one large lump sum all at once. Alternatively, you may have the option to hold off on making any additional monthly payments until the completed property is delivered. This will free up your finances for that duration so that you can invest in other assets. Alternatively, you can save up the payment amounts over that period and make a larger payment upon delivery to reduce the overall length of your long-term payment plan.
The price of the property is fixed at the time of the purchase. By the time the construction is complete, the property has already increased in overall value. Purchasing in advance means that you pay a lower rate for the same property that sells at a much higher cost five years down the road. Elements such as equity, inflation, and monetary exchange rate can increase the selling price.
Savings on maintenance and repair
When you purchase a newly constructed home, you save big on regular maintenance and repair expenses. You may consider them as overall savings in the list of expenses calculated when investing in real estate. As internal elements, such as plumbing, electrical wiring, and domestic appliances, will be in mint condition. You can expect to reduce your maintenance costs dramatically. Additionally, brand new appliances typically come with long-term warranties to cover any needed repairs or replacements.
Personalize your home
Purchasing property before its construction gives you more choice. You may want to choose what type of decorative elements you want to incorporate into the interiors, modify the floorplan, customize the kitchen, and hand-select the appliances. Perhaps you have a specific preference for the location of your home within the development.
You can select a corner lot, or one close to the front, or snag the coveted lot with the ocean view. As an early investor, you have the first opportunity to look at the development plans. This includes seeing models and asking all the questions you need to envision and plan the ideal setting for your future home.
Once the construction is complete, and the property is delivered, an investor can choose to sell it at the increased market value rate or use it as a long-term or vacation rental. You may choose to rent out just a room or two yourself or hire a property management company to oversee the entire property’s rental. Either way, it may generate rental income to cover monthly mortgage payments.
The advantages we mentioned are ideal for both first-time investors or those with more experience who are looking for a valuable return on their investment.
There are many excellent options for investing in pre-construction properties. Our team of professionals at Top Mexico Real Estate can help you.