Top 5 Reasons to Invest in a Pre-Construction Condo Project
Real estate is always the surest way to grow your money, especially if you are deciding to invest in a pre-construction condo project.
When you invest in a pre-construction condo, you are choosing a path where your investment substantially grows from day one till the day you decide to sell the unit.
This long-term investment can become a really good source of profit after all the years of possession, or it can generate passive income for you if you decide to rent the unit.
Whatever you decide to do after you sign the deal, it is critical that you understand how lucrative this investment really can be. And if you are really on the fence, this article will help you make your decision. Below are the top 5 reasons to invest in a pre-construction condo project.
1. Wide options to invest in
Buying a condo is so much different than investing in a pre-construction one, which is actually a better, more profitable, and wise option. When investing in a pre-construction project, you are usually one of the first ones to pay and get the unit location/floor plan of your choice, since you have a large variety of investment options.
You can critically examine your needs and choose the ideal plan to invest in, you don’t have to settle for anything. Moreover, your property starts appreciating from the moment you buy it, and you are the one that’s building the equity of the property, not buying one.
These things count for so much if you decide to sell the unit in the future.
2. Low down payment and flexible deposits
Another critical reason to invest in such a huge opportunity is that it doesn’t require too much money at once. You only have to pay the down payment (that you need to have saved up) to book a unit. The down payment is usually 20% of the total unit cost.
After that, you will have flexible deposit plans to pay for the unit gradually throughout the years. Since you are not bearing all the weight at once, it’s a perfect investment.
3. Leveraged investment
In pre-construction condo investments, you get leverage as an investor. What you are paying in total in such kinds of investments is the total cost of the unit, but your investment appreciates more over the years.
To make it easy, you only pay 20% of the total cost, the bank finances the 80%, but the property appreciates at a total of 100%. With the interest rates being low, for now, your borrowing cost will decrease as well.
4. Increment in rental income
To cover mortgage payments, most investors make the property available for rent as soon as it’s ready for occupancy. The rent takes care of the mortgage payments, after which you can decide to do whatever you want with the unit.
However, rental incomes increase in the long term, which means even if you decide to keep your unit occupied by a tenant, you are in for a long-term source of income, which will be increasing over years.
5. Equity increment
Once you sign the deal, it will take around 3 to 5 years for the construction to complete. These years will build up the equity of your property (again, on the total amount of the property, not just the down payment). You can use this equity as leverage in the financing of your future investments.
