What does it mean to buy “presale” or “pre-construction? Buying presale means entering a contract with a developer to buy a property before it’s been built. Typically you put down a deposit when you sign the presale contract. In return, the developer promises to build the property to the agreed-upon specifications, and by a certain date in the future.
While there are many benefits to a presale, each will be unique to your personal and family needs.
How does it work?
Similar to planting a seed and watching it grow. You put down a series of deposits and then wait for your home to get built. If market dynamics are favourable there is a great opportunity to see increases in the market value of your investment or your future home.
Key Features
While there are many key features and personal benefits to buying a presale home, there are four main ones:
- No Mortgage
- Lock in Pricing
- Alternative Investment
- No Tenants
1.No Mortgage
A mortgage is not required at the time of purchase. This means, no principal and interest payments.
2. Lock in Pricing
The price of your presale will not change once your home is completed and ready for possession. Depending on market conditions, most of the time, as a buyer you will receive an uplift or increase in equity.
3. Alternative Investment
Can’t stomach the volatility of the stock markets? A presale offers an alternative way to grow your money. You can also feel and touch this asset once it’s completed.
4. No Tenants
Since you technically do not own anything. There is nothing to rent out. You do not have to deal with tenants during this stage.