Real estate investments can be a great way to build long-term wealth and financial stability. However, with so many options available, it can be difficult to know which type of property investment to partake in. Two common options are pre selling and ready-for-occupancy (RFO) condos. In this article, we’ll explore all the factors so that you can make an informed decision when it comes to investing in a condo.
Both options have their own set of advantages and disadvantages, and it’s important to carefully consider your needs and preferences. Not everyone can afford to just churn out money with every investment opportunity, and not everyone has the patience to wait for a pre selling condo unit to be completed. On the other hand, some buyers may prefer the customization options and lower prices that come with pre selling, while others may prioritize the peace of mind that comes with an RFO unit.
When it comes down to it, there are several key factors to consider when weighing the pros and cons of pre selling vs RFO condos. These factors include budget, timing, customization options, project risks, location, and long-term financial goals.
What Does Pre Selling Property Mean?
Pre selling, also known as off-plan or pre-construction, is the process of selling a property before it is completed. This is a popular strategy for real estate developers, as it allows them to secure financing for the construction of the building. It also allows buyers to purchase a property at a lower price than they would pay for an RFO condo.
The main advantage of pre selling property is the lower cost. Who doesn’t like affordable units? Real estate developers typically offer pre-selling condos at a discount to attract buyers and generate buzz around the condominium property. This can be a great way to get into the real estate market for a lower initial investment. Additionally, pre selling buyers can usually choose their preferred unit and location within the building, as well as the option to customize the unit to their liking.
However, there are also risks associated with the pre selling stage. One of the biggest is that the project has the potential to be delayed or canceled without prior notice. Whether it be due to issues with development status, location, or any other unpredictable factors. This can leave buyers without a property and potentially cause financial losses. Additionally, pre selling buyers may not be able to fully inspect the property before paying, which can lead to disappointment if the fully constructed units don’t meet their expectations.
That’s why when it comes to considering pre selling condos, it’s important to carefully review the developer’s track record and reputation. You’ll want to ensure that the developer has a history of delivering projects on time and to a high standard. It’s also important to review the features and amenities of the condominium. Is it near prime locations? How does it compare to the current market value? What are the payment terms? What’s the status of the construction? Always consider every factor possible.
What Does RFO Mean?
Ready for occupancy (RFO) units are properties that are already completed and ready for buyers to move in. This means buyers can inspect the property before paying and move in immediately after settling payment terms. RFO units are often more expensive than pre selling units, but they also come with less risk.
One of the biggest advantages of an RFO condo unit is that buyers can see exactly what they’re getting before finalizing payments which can include the extra amenities in the area. This can help reduce the risk of disappointment or surprises down the line.
An RFO condo unit may also offer a quicker return on investment, as buyers can begin earning rental income or move in for personal use immediately after payments.
However, RFO condos are often priced higher than pre selling condo units, and may not offer as much flexibility in terms of customization options. Additionally, the selection of available units may be more limited, as many units may have already been sold.
Pre-selling vs. RFO
Understanding the key difference between pre selling properties and RFO properties can save you from making the wrong investment choice.
A pre selling condo can be great for getting into the real estate market at a lower initial investment. But, RFO units are a “safeer choice” when it comes to knowing what you’re paying for.
When deciding whether to purchase a pre selling condo or RFO unit, there are a few key factors to consider:
- Budget: If you’re on a tighter budget, a pre selling condo may be a better option as their prices are typically lower than RFO units. However, it’s important to consider the potential risks associated with buying a property that is not yet complete.
- Flexibility: If you value flexibility in terms of unit selection and customization options, a pre selling condo may be a better choice as they typically offer more options in this regard. Fully built RFO units may have a more limited unit selection and customization options.
- Timing: Consider your time frame. If you’re looking to move in immediately or begin earning rental income, an RFO condo may be a better option as you can move in or begin renting out the unit for passive personal income right away. Pre selling units may require a longer wait time before the unit is complete.
When considering whether to invest in a pre selling or RFO condo, it’s important to do your due diligence and carefully consider the potential risks and benefits of each option. Depending on where you are in life, these considerations can greatly affect how you’ll be able to manage your investment and maximize its potential. Ultimately, it’s up to you to weigh the pros and cons of each option and choose the one that aligns with your specific goals. But don’t worry, our goal here at Asterra is to make sure that you’re well taken care of for any and all condominium property-related concerns.
When it comes down to it, there’s no one-size-fits-all answer to the pre selling vs RFO condo debate. It all depends on your individual needs, preferences, and long-term financial goals. By carefully weighing the pros and cons of each option and working with us at Asterra, you can make an informed decision and secure an investment that aligns with your unique situation.
Get in contact with us and we’ll make sure you’ll know what the right condominiums are.