The current economic environment is, at best, volatile. There is a direct link between the turmoil that exists in countries like the USA and the UK and the volatility of the financial markets. Unfortunately this means that many companies and people can see rapid changes in fortunes in a very small space of time; and these are not always positive changes.
This has meant that many people are being more cautious when committing to purchasing items; specifically high value purchases such as a new home. A quick look at the options available will raise the possibility of pre construction homes. You may well be referred to this type of property by a realtor such as superiorrealtypoint.ca who are specialists in dealing with this type of purchase and will look after your interests.
The question then becomes whether you should consider pre construction houses or stick to the more traditional route.
Reasons to buy a Pre Construction House
- The cost will be less than the property is really worth; providing you with instant equity and making a property more affordable. It is even possible to purchase pre construction homes with the idea of flipping them.
- You have the ability to customize pre construction houses. Whilst the outside of your new home will be in accordance with planning regulations; the inside could be considered to be an open book. This means you can locate the rooms where you want and add or even take away some of the rooms. It will make you feel like you have designed your own home.
- Pre construction houses require a very small initial deposit and it could be some time before the project is completed. This will allow you plenty of time to save up the necessary funds to pay the rest of your deposit or even reduce the value of your loan.
- Maintenance should be minimal. Alongside the fact that everything is new and should not need extensive repairs you will also have a guarantee provided by the builder.
Reasons not to buy Pre Construction Houses
- No matter how good the sales person, the graphics or the lure of the savings is, there is no refuting the fact that you are purchasing something that you have not seen beforehand. You will not be able to assess the quality of the finish until the property is completed; and may then face a difficult battle to get any issues corrected as the pre construction houses developer will not wish to make any changes at a cost to themselves.
- Purchasing pre construction homes relies on the builder being able to complete the job. This will generally only be possible if they sell enough units prior to commencing the build. Unfortunately this process can take several years and will leave you without a home in the meantime!
- Your capital is tied up and could be for up to five years. There is no easy way to release funds committed to pre construction houses. It is considered a non-liquid investment.
It is important to consider your options carefully before committing to pre construction houses.