You don’t need to wait for a building or condo to be built to invest in it. For that there are real estate projects in preconstruction. These are those projects that have not yet been built, but that can be acquired. Developers put them up for sale in early stages to finance the rest of the construction. This scheme, which is widely used in apartment projects in Miami, offers investors great benefits.
What are the advantages of investing in pre-construction apartments in Miami ?
1. Price
For real estate investment it is very important to choose the right unit and project. The goal is to maximize the investment through a monthly rent or a sale in the future. Thus, when you invest in the pre-construction stage, you get the lowest possible price.
By investing in the pre-construction stage, or even planning, the investor can acquire properties up to 20% cheaper than when they are already built. When the project is finished, the price of the apartment will have increased from the initial purchase price, so it will be ready to be rented or sold. In this way, it will give an immediate appreciation to the investor.
2. Control over investment
Like all investments, real estate is a cyclical investment, meaning it can go up or down. What makes the difference is that the investor is in control of their investment. Thus, from the beginning it is the one who makes decisions about the asset (Lee, 2015).
If an investor has a portfolio in the stock market, he may lose or double his money overnight. In contrast, if you make an investment in Miamiapartments, the portfolio doesn’t go anywhere. If the market price goes down, the investor may decide not to sell. That way, you can wait for the market to improve to do so and maximize your income.
3. Valorization
There is the possibility to buy a finished apartment and rent it immediately. However, resold apartments do not appreciate in value as much as pre-construction units. One of the reasons is that people prefer to buy new apartments rather than used ones. In addition, they usually pay more for modern finishes and better amenities.
4. Long-term investment
Being an investment that is valued from the moment it is acquired, it is recommended to buy at the earliest possible stage. In this way, the long-term investment returns will be higher. The investment in apartments in Miami in preconstruction implies that when the property is ready it can become a source of passive income, so there is no need to sell it.
Some myths about pre-construction projects
There is a misconception that when buying a project in preconstruction you do not see returns quickly. This idea is not correct, because the appreciation of capital is very high from the moment the purchase is made.
Every day the asset appreciates, especially if you invest in apartments in Miami that are located in up-and-coming neighborhoods. Some examples are Wynwood or the Miami Design District. There, due to construction, demand tends to increase.
Another belief is that unplanned finishes and expenses can result in higher cost to the investor. However, projects in preconstruction represent a saving between 10% and 20% compared to the investment in those that are finished. Keep in mind that the maintenance of apartments in Miami that are used often represents higher costs due to the aging of the properties.
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Apartments in Miami: three tips to choose the right investment
When you bet on an apartment in preconstruction, you invest in the builder more than in the building. So that you can take the necessary precautions and plan well, here are some tips to choose the right investment:
- Research the builder’s track record and history.
- Make sure there are no taxes for the development of new construction in that place.
- Check that the construction company has the required building permits.
Now that you know the advantages of acquiring apartments in Miami, what do you expect to invest in those that are in the pre-construction stage and increase your assets?
References
GTA Homes. (n.d.). Why Pre-Construction Condos Are The Best Investment. Recovered from https://www.gta-homes.com/real-estate-info/why-pre-construction-condos-are-the-best-investment/.
Lee, I. (2015). Why Invest in Pre-Construction Condos. Toronto’s Real Estate Investment Coach. Retrieved from https://www.realestateinvestmentcoach.ca/why_pre-construction_condos.
Precondo. (2018). 7 Things You Need to Know Before Investing In Pre-Construction Condos. Recovered from https://precondo.ca/7-things-investing-pre-construction-condos/.