When you drive around the streets, readnewspapers, or search the internet, you can see various advertisem*nt on condominiums for sale.These advertising materials often seem irresistible because of their low downpayment, stretched payment terms, and promising location that is in closeproximity to almost everything you need. Indicated in these ads is the projectstatus which is either readyfor occupancy or preselling condo.
The meaning of RFO isReady For Occupancy. This refers to a condo unit whereyou can move in anytime as long as you have completed the paperwork and settledthe required payment. Presellingcondo, on the other hand, refers to a condo unit being sold at the very early stage ofdevelopment, before its completion, during construction of the property orwhile it is still in the planning stage. In other words, preselling condo meansthat the property is not yet built or it is still under construction when thetime the condo unitis purchased.
Presellingcondos are said toallow property developers to finance the construction of the project andenables potential investorsto purchase the property at affordable prices.
You might be asking yourself right now aboutthe potential risks and the advantages of investing in a preselling condo. While it may seem unconventionalto buy a condo property that does not exist yet, preselling condos offer investors with variousbenefits.
In this article, we have put together a list of advantagesand potential risks of buyinga condo property while it is still in its preselling stage.
The Advantages
1.Cheaper price and flexible payment terms
A lot of first-time investors opt for a preselling condo becauseof its lower price which can be more or less than 30% cheaper than a ready foroccupancy unit. Aside from this, there are also developers who give additionaldiscount or offer flexible and stretched payment terms where the down paymentcan be as low as 10% payable for 3 years, with lump sum to be paid either bybank or the developer’s in-house financing.
If you are a real estate investor, preselling condos are agreat investmentbecause their market value will surely increase by the time they are completed.Some people buy presellingcondos and resell them as soon as finished, for a higher price.
2.Freedom to choose your desired unit
You can definitely choose yourpreferred unit and floor plan with preselling condos. You can go for the betterviews, easier access to amenities, and lesser foot traffic.
Depending on the pre-sale contract,you can also inspect the unit at every end of the construction phase and informthe developer of any defects or issues that need to be addressed.
3.New features and amenities
Preselling condos offer the newestand the latest design, features and amenities that the clients can enjoy should they want to relax and unwind outside their purchased condo unit. To keep up with the modern and digital times, some condo developers offer smart condos as added security feature.
4. Excellent investment option
Investing in a preselling condo ispurchasing a property at today’s price for tomorrow’s equity. Once the condo iscompletely finished and ready to be occupied, you can earn a profit by sellingthe condo unit at the current market price.
Once the condo property iscompleted, you can also rent it out and through this, you can be able to earn asteady flow of income. In this case, it makes sense to buy a preselling condo so you can carefullypick out the unit that will be loved by your future tenants.
The Risks
1.Changes with no prior notice
A preselling condo contract willusually specify that the property will be constructed according to the finishesand materials described. However, the property develop still has the right toalter these in certain circ*mstances without compromising the quality.
With this, you should be aware thatthese things can happen which you may not be notified.
2.Delay in Property turnover
Preselling condo contracts usuallyhave delay clauses for delayed turnovers giving the developers extra time todeliver the project.
3.Failure of completion
The bigger risk that you can have ininvesting in a presellingcondo is the failure of the developer to complete the project due tobankruptcy. In this case, you may not be able to get a refund for your deposit.
4.Falling Property Market
Preselling condoscan be an excellent investment because of the promise of property valueappreciation. But there is also a very low risk that it will not.
That is why it is important for you to study theexisting market conditions and be knowledgeable of the rental yields within thearea.
Buyingand investing in a preselling condo needs an informed decision. In order to avoid the trouble of having afailed investment,you should always remember to buy and invest in credible and reputable condo developers who haveproven track record in delivering quality condominium properties on time. Read any contractcarefully and consult a lawyer to guide you in understanding the clauses beforeyou even sign it. Check on your budget and make sure that you can afford whatyou are planning to buy and investon.
If you are a first-time condo investor, youmust be very vigilant and wise in choosing the right property for you.Carefully check any offer and weigh the benefits over risks. In case you arestill not sure of investing in preselling properties, but also do not want tomiss out on any of its perks, choose a reputable real estate developer so youwould not have to worry on the property you would spend your hard-earned moneyon.
If you are looking to buy a condominium unit to invest in,Vista Residences, the condominiumdevelopment arm of the country’s largest homebuilder, Vista Land &Lifescapes, Inc. offers readyfor occupancy and preselling condominium projects that are strategicallywithin inner city areas, in close proximity to developed business districts andprestigious schools.
For more information on Vista Residences’ condominium projects, email us at[emailprotected]or follow@VistaResidencesOfficialon Facebook, or contact the Marketing office at 0999 886 4262 / 0917 582 5167.
