Benefits of Buying a Pre Construction Condo

Like a most real estate transactions, buy a condo have many benefits. Once a luxury condo has been completed and is fully operational, resale prices have generally appreciated in the double digits. You can see this in the first 18 to 24 months. This has happened time and time again and it’s a major reason many investors have purchased multiple premium condos in the pre-construction phase.

The cliché relative to preconstruction real estate is “You get to secure your purchase of tomorrow’s real estate at today’s prices.” And while that statement may be passed around a little too often, it does capture the very definition of preconstruction. You do get to buy the condo of the future at present day pricing.

Your opportunity to purchase a condo in the preconstruction phase is quite good. Nearly all condos are sold at preconstruction. In fact, the very best condos tend to sell out 100% of their inventory in the preconstruction stage. Savvy real estate investors know that preconstruction pricing can be a bargain and that the condo can sell for a great deal more once it is completed and fully operational.

The Mayority of developers will space the release of their inventory over the course of two or three phases. Pricing tends to be progressively higher each phase. On some of the higher end condos, you can see a price jump of 10% between phase 1 and phase 2. And, the difference between phase 2 and phase 3 can be equally substantial. This differences are why you’ll often find the most savvy real estate investors who own several condos making their purchases in the very first phase of the preconstruction development.

Anyway you should be very careful and incredibly selective when considering the purchase of a condo. In the last few years many pseudo investors have lost money by purchasing condo with the idea of turning a quick buck in mind. Not all condos are the same. If the condo does not have a major brand associated with it, one should be quite weary.

Besides, if the condo is being built in a region that is saturated with condos, be particularly weary. This problem of saturation has afflicted the Las Vegas market in recent years and many condo owners ended up purchasing a property that is worth less now than when they originally bought it. The theory of supply and demand holds true for condos, as well. If there is a glut in the market place of condos, you might want to think twice about purchasing.