Condominiums are an option for both novice and seasoned investors seeking a property to buy or rent out. In addition to the peace of mind and less upkeep, the initial investment in a condo is lower than that of a single-family home.
However, a pre-selling condo is the best choice for those looking to purchase a property for investment, those who want to reside close to their place of employment, or those who want to participate in the market via price appreciation.
Pre-selling condominiums are something you’ve definitely heard about if you’re looking to invest in condos. Buying a condo during the pre-selling phase might be a terrific idea for people looking to save a lot of money and make a lot of money in the future.
Before we take a look at the pros and cons of pre-selling condo Philippines, let’s define first what is a pre-selling stage in the real estate industry.
What are Pre-Selling Properties
Condos that have pre-selling units are those that are advertised for purchase while the development is still in the conceptualization or construction phases. To put it simply, the initial selling price of these pre-selling condo units is lower than its original price since the project has not yet been finished, making it attractive to prospective purchasers.
Educating yourself as much as possible about pre-selling condominiums will help you decide whether or not this is a viable option for you. With that, here are the pros and cons of pre-selling condo Philippines.
Is Pre-Selling Condo a Good Investment- Philippines?
Buying a pre-selling condo unit probably doesn’t bother you if you’re an optimist who believes a great future is ahead. This is true especially if you involve yourself with a reliable developer like Asterra, the newest condominiums in town that sell pre-selling properties. We could provide you with the security net that you need to calm your doubts about buying pre-selling properties.
A quicker and more fruitful return on investment.
Until the agreed-upon date, the down payment amount that you pay for the pre-selling unit that you chose will not change.
However, if you take inflation into account, the Php 15, 000 now will not buy you the same thing in three years. Also, the condo’s market value or property prices in general tend to improve over time, so in those years, your condo may be worth as much as 40% more than you paid today.
This basically implies that taking advantage of pre-selling in a residential condo as a real estate investor is the best way to maximize your investment return.
Gain first dibs on prime unit locations.
During the first six to nine months following a project’s release, there are enough units to go around. Get in on a pre-selling bargain within this time frame, and you may select from the greatest available units in terms of location.
Did you know: Condos are popular, and many individuals would want to own one, but the limited selection often makes them consider renting instead. So, make sure to take advantage of this prior notice of pre-selling stage of a condo unit.
No pressure of moving in soon.
As the building won’t be done for quite some time, you may stop stressing about when to move in. All that is required of you is diligence in paying the required monthly payment each month.
In a few years, you’ll get to enjoy the fruits of your labor when you move into the apartment you’ve been planning for.
Flexible payment schemes.
Payment plans for pre-selling condominiums tend to be more flexible, making it easier to meet your monthly budget.
Suppose the nice condo unit you’re considering costs Php 1.8 million, and the completion date of the project is three years from now. A 30% down payment would bring the total to Php 540, 000. If you break it down into the 36 months or three years it will take to complete the project, the monthly payment drops to Php 15, 000, lessening your burden in paying your unit.
Get it at the lowest possible cost.
Without a completed condo apartment to show you, developers usually offer a reduced price to encourage you to invest. If you pay the deposit in full, you can even get a discount.
Risks of Buying Pre-Selling Condos
As we mentioned earlier, there are both pros and cons of pre-selling condo Philippines. In fact, a pre-selling property might pose several risks due to the inherent unpredictability they provide. Of course, while working with a reliable licensed real estate broker, you can have some assurance, but it’s still impossible to predict what the future holds.
Fraudulent property management.
Unfortunately, frauds and other forms of swindling are also a problem in the real estate market. Therefore, condominium properties that are still in their planning stages are subject to stronger regulations to protect their future tenants.
Corruption among real estate brokers and agents is a real and present danger in the nation. Do your homework, and don’t be shy about asking for proof of credentials. Follow your instincts and go with your first thinking if you’re experiencing doubts. Always remember that if something seems too good to be true, it generally is.
Possibility of illegal activity.
As was previously said, real estate is not immune to fraud.
The purpose of Presidential Decree 957, often called the “Subdivision and Condominium Buyer’s Protective Decree,” is to guarantee that developers and similar entities would sufficiently comply with government laws and prevent any pre-selling frauds.
Unexpected adjustments may occur.
Changes, such as those involving unit size or floor design, may occur without prior warning, despite the fact that purchasers are normally obliged to sign a pre-sale contract regardless of such changes.
However, potential customers may still feel duped since they aren’t getting exactly what they expected from the pre-sold properties. Not being able to secure a refund for an unfinished job is the worst-case scenario in buying a pre-selling project.
In light of the potential pros and cons of pre-selling condo Philippines, it is crucial that you choose a dependable developer with a proven track record.
Developers that have a track record of sticking to their promise and delivering on time (or within a fair time frame, at the very least) during the handover are recommended.
Asterra is the newest vertical development from Vista Land, a top trusted developer in the Philippines. Each residential condo cluster of Asterra ranges in height from 4 to 7 floors, and has a modern design, ample square footage, and an efficient floor plan– providing the best and most convenient home a few hours from the metro to young professionals and on-the-go individuals.