Pre-selling or off-the-plan condominiums are units that are sold to buyers at the very early stage of development which may occur before it is completed, during its construction, or before its groundbreaking. In other words, the unit is not yet built or it is currently under construction at the time the unit is purchased.
Pre-selling allows property developers to finance the construction of the project and enables potential investors to purchase the property at affordable prices. But before you proceed in investing in pre-selling condos, you have to take note of its benefits and risks.
Benefits
1. Lower Introductory Price
Since the property is essentially nonexistent at the time of selling, property developers often sell their units at reasonable prices which are approximately 30% lesser than ready-for-occupancy (RFO) condo units. Pre-selling price is definitely the best price.
2. Flexible Payment Schemes
To further attract more potential buyers, property developers offer discounts, flexible payment schemes, and other promotions which can provide more funding for the completion of the building.
3. Freedom In Selecting Your Desired Unit
Clients can definitely choose their preferred unit and floor plan, which may include customization and inspection of their unit at the end of each construction phase depending on the pre-sale contract. Clients can also avail of the latest in condo amenities.
4. A Propitious Investment
Buying a pre-selling property is purchasing a property at today’s price for tomorrow’s equity. Capital growth is almost always a guarantee. Once the property is completely built and ready to be occupied, the buyer can earn a profit by selling the condo unit or choosing to rent it out.
Risks
1. Changes Without Prior Notice
A pre-selling contract will usually specify that the property will be constructed in accordance with the finishes and materials described; however, the property developer still has the right to alter the finishes and materials in certain circumstances without compromising quality. As a customer, you should be aware that there can be material changes in unit sizes, floor plan, finishing, features, or amenities about which you may not be notified.
2. Delay In Turnover
Pre-sale contracts have delay clauses which permit the property developer with extra time to deliver for up to a year or more.
3. Failure Of Completion/Developer Bankruptcy
While pre-sale contracts often have delay clauses for delayed turnovers, the bigger risk is that you may not get a refund for your deposit in case the pre-selling project does not push through or the developer goes bankrupt.
4. Rising Interest Rates And Falling Property Market
Pre-selling condos can be excellent investment vehicles because of the promise that their market value could increase upon completion. But there is also a risk that they won’t. As a buyer, you have to be knowledgeable of the prevailing market conditions by monitoring the annual and quarterly data on capital appreciation and rental yields indicated by real estate consulting firms. You should also check the prevailing interest rates published by Bangko Sentral ng Pilipinas.
If you want to invest in pre-selling condos, select a reputable property developer like Alpina Heights Properties Corporation and coordinate only with their licensed, trustworthy brokers and agents. Alpina Heights Properties Corporation (AHPC) has an outstanding reputation for building quality projects and delivering them on time.
To know more about Alpina Heights Properties Corp., log on to their website at www.ahpc.com.ph and like their Facebook page, www.facebook.com/OfficialAHPC/. You can also check out their flagship project, Alpina Heights Condominiums at www.alpinaheights.com. Follow them on social media through www.facebook.com/AlpinaHeights/ and www.instagram.com/officialahpc/.
