Pre-construction investing has picked up in popularity in recent years as people are looking to get ahead of the curve. Here are 10 reasons why you should consider investing in pre-construction properties.
Choose your unit’s location and view
You have the opportunity to choose your unit’s exact location and view. In a new development, you will often be able to pick the best situation for your unit in the building. For example, you may be able to choose a corner unit with extra windows and natural light, or a unit with a better view.
Lower prices
You may be able to purchase a property at a lower price than if you waited until after construction was completed. This is because developers are often motivated to sell pre-construction units in order to generate capital for other projects they are working on. As such, they may be willing to offer discounts of 5-10% or more off of the expected future value of the property.
More customization
You may be able to customize your unit to some extent. Developers sometimes offer buyers the opportunity to upgrade finishes or make other changes for an additional cost. This can be a great way to get exactly the home you want, without having to do any renovations after move-in. You can also optimize your unit for resale value by choosing finishes and upgrades that will be popular with future buyers.
More time to save for a downpayment
You have time to save up for your down payment. Since you are not buying a property that is already built, you usually have several years between the time you sign a contract and when construction is completed. This can give you time to save up for a larger down payment, which can help you get a lower mortgage rate and save money in the long run. It might also give the market time to change in your favour, especially if you sign a variable rate mortgage, and you are able to make smaller monthly mortgage payments.
Government incentives
You may be able to take advantage of government incentives. In order to encourage development in certain areas, governments will sometimes offer tax breaks or other incentives to developers. These savings can be passed on to buyers in the form of lower prices, making pre-construction units more affordable.
The developer may offer to pay closing costs
The developer may pay your closing costs. In order to encourage sales, some developers will offer to pay a buyer’s closing costs. This can save you thousands of dollars and is especially helpful if you are a first-time buyer.
Don’t worry about maintenance and repairs
One of the benefits of buying a brand new home is that you don’t have to worry about maintenance or repairs for many years. Everything in the unit will be new and under warranty, so any problems that arise will be the responsibility of the developer to fix. This can give you peace of mind and save you money over time.
Higher resale value
The resale value of pre-construction units is often higher than that of existing homes. Because buyers are often willing to pay a premium for a brand new home, pre-construction units often appreciate in value more quickly than existing homes. This can make them a great investment, whether you plan to sell before or after construction is completed.
No previous owners to manage
You don’t have to deal with previous owners. When you buy an existing home, you often have to deal with the messes and problems left behind by the previous owner. With a pre-construction unit, you can be the first person to live in the space, so you don’t have to worry about dealing with someone else’s messes.
Tour the development
You can tour the development before making a decision. When you buy an existing home, you usually have to rely on photos and descriptions to get an idea of what the property is like. With a new development, you can often tour the site and see the units in person before making a decision. This can give you a better sense of whether the development is right for you, and whether the unit you are considering is good value.
Conclusion
If you are thinking about buying a property, consider the advantages of investing in pre-construction units. From better prices to greater customization options, there are many benefits to be aware of. Keep these ten advantages in mind as you begin your search for the perfect property.
