Buying a pre-selling condo unit is a good investment, but there are things that you need to know to make it even better. Why settle for good when you can have the best? Investing in this kind of real estate at its planning or construction stages gives you a lot of perks that you won’t get when the unit is ready for occupancy. It is usually cheaper, and developers tend to provide better offers during this stage.
Another advantage is the ability to choose what you would consider as the best location. This is not available to RFO (ready-for-occupancy) buyers because they get what’s left by the pre-selling buyers. But should you rush into buying pre-selling condos? No, there are a few things that you need to consider:
- Set aside some cash for a downpayment Although a bank loan is a good idea for a large purchase like a condo unit, you have to remember that you still have to shell out for the downpayment. Usually, properties at prime locations charge 20% of the purchase price. This is especially true for high-end condo units.
- Know the developer Make sure to know the reputation of your developer. In most cases, newer ones are short on cash and are looking for their buyers to help with their projects. When something goes wrong with this, the project might not materialize. On the other hand, established developers have a reputation to protect and are more financially secure. They are more likely to deliver their promise. Before signing any contract with the developer, make sure to snoop around.
- Choose the best location The adage “location is king” is often true with real estate investment. For example, a pre-selling condo in Ortigas is in a prime location because it is located within the shared boundaries of three major cities: Mandaluyong, Pasig, and Quezon City. If you plan to sell or rent it out after it’s ready for occupancy, you can easily do so because this place is highly urbanized.
- Read the fine prints Before signing any contract, make sure you read the fine prints. Better yet, consult a lawyer so that you are fully informed of what you’re getting into. Ask the developer’s agent questions that are pertinent to the property. Schedule a time when you can sit down with them and discuss the contract thoroughly. Purchasing a condo unit is a long term commitment, especially if you’re planning to finance it through a bank loan.
- Study the market conditions Buying a real property comes with the presumption that its value will appreciate over time. This is true with pre-selling condos, but there is a risk that it might not understand as you expected. The best thing to do to counter this is to observe or study the prevailing market conditions.
Although its advantageous to buy pre-selling condos, it’s not without risks. Any form of investment is not without risks, and you can mitigate it by knowing what you’re doing. You need to play the game well to maximize your rewards.