Resale Investment Condos VS Pre-Construction Condos
Pre-construction condos can be considered for a short-term investment, but you should really invest in buildings that are not more than 10 years older. This way you can maximum appreciation rate. Moreover, purchasing a pre-construction condo can be paid back with future rental prices.
There are four reasons why people prefer resale investment condos over pre-construction condos:
- Tangible Asset
- Value From Day 1
- Closing Cost
When you buy a condo for resale purpose you can see the condition of that building with your own eyes. You can observe the location, locality, neighborhood, and views. Everything is in front of your eyes. You can easily evaluate if your investment is worth the time and money.
While pre-construction condos are just blueprints of the actual building. You can’t judge the final product by a look at the site map only. You might get things differently. You might not get what you were promised. Although, you might get them for a cheaper price. So this is why resale condos are more preferred.
- Value for money
As you get yourself a resale condo you can start earning from it. As soon as you are done with all the legal process of land transfer and payment of taxes. You can look for a tenant from that moment and with the tenant you get a regular source of income which will help you with your down payment and loan money. You even get tax benefits for that.
With pre-construction condos, you just invest in the property which you might get for a long period of time. You won’t be getting returns from your investment right away. You must have to wait until the construction is finished and you get complete possession of your property.
- Closing cost
Closing cost is another factor here. With pre-sale condos, you just have to deal with land-transfer cost, state taxes (if any) and the legal fee of hiring a lawyer. And after all this, you are ready with your own condo.
Whereas, with a pre-construction condo you have to think about a lot more stuff besides legal costs and land transfer deeds. You might be dealing with development charges, state registration charges, and several other stuff. You can’t include these costs into your debt as you might have to pay all these in cash.
For a typical pre-construction condo, you get a tentative timeframe of 4-5 years. As this is a huge amount of time and several incidents might happen in your life, you might be in need of capital and you must sell some of your assets to overcome this situation. And most of the construction firm doesn’t necessarily allows you to sell the unit before possession.
This is why resale condos are better. You can not only sell them but you can get a loan against them so without selling assets you can tackle the situation that you are in. with resale condos you can even tap into the equity through multiple options prior to the five-year mortgage is up for renewal.
So as a buyer you should consider the above factors before investing your money and time. You can invest in pre-construction condos only if you have plenty of other assets. For learn more about investing opportunities you can visit Ola EC.