When given a choice between buying a preconstruction condo and move-in-ready condo, quite a few people opt for the latter. This is of course understandable from a certain point of view. With pre construction condos, you can’t be entirely sure that you’re getting the design you want. You have to wait for the construction to be completed, and in the meantime you have to worry about whether your builder will declare bankruptcy along the way.
But in several crucial ways, going with the preconstruction condo can be the better option:
Lower Investment Costs
It’s true, that with preconstruction condos there’s a certain level of risk involved. There’s a lot of waiting too. But that means that the price of the unit is a lot lower than what the unit would cost if it has already been completed. It can be as much as 30% cheaper, and in some cases the developer may even put in an extra discount to drum up sales.
What this means is that your potential ROI becomes much greater once the deal is done and the unit is complete.
More Flexible Payment Schemes
When you buy a condo, you generally have to put down up to 20% of the price upfront. If the unit costs half a million dollars, that means putting up a cool one hundred grand at once. That’s not often easy, especially for first time buyers.
But with preconstruction condos, there’s often some flexibility allowed in the down payment. It doesn’t have to be all upfront right away. Instead, you may be able to spread the payments over a period of time, such as over a year. In some cases, you can stretch the down payment over 15 months. That’s a lot easier for many condo buyers.
Less Risk Than You Think
We’ve discussed the risks regarding condos that haven’t been completely built yet, but the risk can be reduced. All you really have to do is to check the history and reputation of the builder. If the builder has a great track record of building quality units on time, then you’re not risking all that much at all. It becomes a much safer investment, since the builder has every reason to maintain their sterling reputation.
With a good builder and developer team, you get a fair sense that the design you agreed to will be the design you get for your unit. You won’t need to wait extra years for the completion. There aren’t any surprise bills along the way as well.
Since you’re still in the preconstruction stage, you may very well get into the deal early enough that you can add your input regarding the design of your unit. You can then get the layout you want for the kind of lifestyle you envision for yourself in the future.
Since the units will be completed in the future, they will generally have design traits that are more current than move-in-ready condo units that were designed so many years ago. The unit also won’t have to undergo a major renovation for at least the next decade, since your design preferences will be consulted in the planning stage. In addition, any structural flaws you notice can be fixed for free during the preconstruction stage.
Lastly, many developers offer additional incentives to get you to jump in. You may get to enjoy free appliances that will be installed and perfectly suited for the space. You may also get additional storage space within the building.
Getting a preconstruction condo is more of a long term investment, but it also offers a potentially larger return. Many people regard this as a prime opportunity for investment, which is why many try to get into the deal as early as possible. with preconstruction condos, there are simply too many potential advantages to ignore.