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Investing in a Pre-Selling Condo

June 4, 2022 investing in a pre selling condo

Why should I buy a pre-selling condo if I can already move into a Ready- for- Occupancy (RFO) unit? Pre-selling a condo is risky, scary, not worth it, and not ideal. Are these all true? Have you done your research? Is it really good to invest in a pre-selling condo?
What is a pre-selling condo unit? It is defined as units being sold before its completion, during its construction, or while still in the planning stage. This means that the property still does not exist and the developer is yet to break ground for the project. The delivery date may vary but from start to finish, it may take up to 5 years depending on the type (size or height) of the building and on the developer. In short, it takes time for pre-selling units to materialize. Taking the risk when investing in pre-selling real estate is part of the process but it pays to know your developer!

Let us give you the rationale why you should consider a pre-selling condo to be a very good reason to invest and earn at the same time.

Lower Valued

A deal that is too good to be true is something you would not argue about, am I right? In real estate. When the project is still in its Pre-selling stage, the “Come On” is to offer a lower investing rate. For some developers who do not have all the budget to build a condominium, they use this money to finance the construction of the building that is why buying at this stage will give you an excellent deal for your hard-earned money. Units are normally 30% or lower than the finished unit price. You are also protected from future price escalation if you purchase during this time. Price normally increases during construction.

Flexible Payment Scheme

Flexible Payment Scheme

Real estate developers offer different schemes and promos during this stage of construction. Some would offer low initial investment and amortization spread out over 5 years or more. Some would offer stretched down-payment wherein the monthly payment is sometimes lower than the amortization. With this type of scheme, anyone can have the power to own a condo home. For some developers, they would give big discounts for spot-cash down-payments or they would offer 10% to 15% discounts paired with flexible payment schemes. And for others, they might offer a down payment payable in 3 years. Some of the schemes to look out for from developers are — no down payment, low down payment, low monthly amortization, longer years of payment, pay-light schemes, and no lump sum payment to name a few. Those sound too good to be true. But really, these developers can cook up really good deals during this stage of construction.

Better Units

Most developers create enticing showrooms that would give you the “Wow Factor” that will make you say “Yes Sign me up!” or “You got me at hello” … this is not impossible. Nowadays, developers create the best condo homes for your money. At this stage, you can choose the unit and location according to your preference. You may choose to have a view of the Central Business District, the Mall, or the amenities, or even have a good view of the sunrise or the sunset. Not only that, but if you believe in Feng Shui, you can also choose your favorite letter or number. I know, I don’t need to convince you further. The best condo home deal has a good convincing power to make you decide on purchasing a pre-selling unit.

Equity

Purchasing at the pre-selling stage allows you to earn real estate equity even if your condo home is not yet turned over. What that means—equity refers to the difference between what the property is worth and what the owner owes from the developer or financing institution. The reason is that the value of the unit increases up to 2 to 3 times before completion. Wherein the average total increase is not less than 40% of its original price range.

If you decide to resell the condo home after the turnover, you can expect a good deal as the Pre-sell value of units yields a higher value than the amount you purchased it. If on the other hand, you decide to rent out the condo home, you will also get a higher rental value for your unit especially if it is strategically located in developing or developed areas. Deciding to buy at this stage makes it a good option to own a pre-selling condo unit. That does sound really good right?!
Well, at this point, I know you are already convinced of how profitable owning a pre-selling condo is. You may get in touch with Megaworld Manila to know more about the Pre-selling condo homes available for your next investment.