Investing in pre- construction condos can be a fantastic way to maximize profit for solid returns.
1. Do Your Research-Infamous location, location, location. If you are wanting to buy a place for yourself or for an investment the same fundamentals should apply. Why would you or someone else like to live here? Condominiums would mostly interest young professionals, couples or "empty nesters" that do not want to worry about home and yard maintenance, the extra security or want to enjoy the close proximity to shopping, restaurants and transportation. Maybe its an area that doesn't necessarily require the need for a car. All things apply for your quality of life, a buyer for your condo or a potential tenant that will pay you top dollar to rent your space.
2. Buy On Paper-And Do It Early- Few are able to buy without seeing and walking through an actual floor plan which makes many weary of putting down their deposit. Usually the builder has a sketch of what the finished building will look like, floor plans, a list of amenities and pricing for the available units. This benefits those of you that can see the "vision" of the finished product. Typically a builder is pre-selling at a lower price per square foot than if the building was finished. Lending institutions are wanting to confirm there is a demand for this building in order to lend the funds to start construction.
3. Pay The Minimum Downpayment To Reserve- Once you have chosen the unit you wish to live in or buy as an investment, put down the minimum down payment in order to secure any price increases. Typically it will be 20% down and can be broken into 4 payment schedules. (initially 5% at signing, 5% after the first month, 5% in 3 months and another 5% on possession) Time lines vary at different stages of construction.
3. Help Promote- The more interest and demand you help bring to the area and project that you just bought into, the more valuable it will be. You want others to buy into the pre-construction phase which causes the supply and demand affect. The quicker they sell, less will be available and the prices will increase. The few remaining units which will be selling for more money per sq/f than the pre-sale prices, will now be selling at top dollar as few units will be available.