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5 reasons to buy a pre-sale home

Investing

November 12, 2019

Buying a pre-sale home is one of the real estate investment opportunities that you should not miss.

For starters, you can find residences at very affordable prices that, with projected growth of the area and capital gain, will increase in value over time. As you know, investing in real estate is one of the 5 safest investments you can make in your life: You get a tangible asset that you can protect from inflation, increase your money in the long term and make greater return - or faster - if you decide to rent that residence.

The opportunities to generate extra income with your property have increased thanks to online listing sites like Airbnb, where you can list your rental home and rent it however you decide.

More people are acquiring real estate developments in the Riviera Maya or real estate developments in Tulum, mainly because these two sites are considered important for tourism in Mexico and receive a large number of foreign tourists. Therefore, residences in Tulum and Riviera Maya generate great benefits for their owners.

Did you know that Riviera Maya is one of the top destination wedding location? Yes, destination weddings in Riviera Maya and Yucatan Peninsula are on the rise thanks to the spectacular natural wonders of the Caribbean: white sands beaches, the Mayan jungle, cenotes, and Archaeological sites are part of the attraction that has conquered foreigners.

Real estate investment is not only about buying residences in areas with high capital gain: Currently, investors are looking to generate constant income by renting their properties in different ways, either full time or seasonal rental,  home-sharing, when they are not inhabiting them , etcetera.

And not only tourism is growing in these areas, but also foreign investment that see in Mexican Caribbean a possibility of future growth and expansion.

What is pre-sale real estate?

Pre-sale real estate consists of acquiring a house, apartment or lot that is part of a real estate development, but the construction work has not begun or have a percentage of progress. In other words, the pre-sale allows you buy properties before they go on sale to the general public.

That does not mean you need some special document or membership to buy a pre-sale home; although there are real estate agencies that give discounts or have special newsletters to notify their clients about their real estate developments, pre-sale is an opportunity for any public that wants to acquire a house, apartment or lot.

However, as mentioned in ‘What is the investment that generates higher capital gain?’, one of the things you need to consider if you want to increase return on investment is buying a pre-sale property.

One of the most obvious reasons -and the one that attracts investors- is the possibility of getting great deals: you can buy a pre-sale residence at a low price, but property value will increase over time.

5 reasons to buy a pre-sale home
By investing in a pre-sale home, you acquire a property at a lower price, with the guarantee that surplus value will increase over time.

5 reasons to buy a pre-sale home

Real estate developments are not built in a day. They require a lot of planning and efforts: plans, permits, contracts, etc. Construction- as small as it may seems - requires some time to verify that the new residents will be comfortable and happy,  to be able to deliver the development with the best house finishes to make it move-in ready.

In addition, construction time is an excellent opportunity to make your money grow or plan your move. For example, some foreigners who plan to retire in Mexico use that time to make sure they have all the required documentation ready to do so, while others decide to take advantage of the pre-sale prices of a residence, knowing it will increase its value when the construction is finished.

Of course, there are other benefits that you can get when buying a pre-sale home, such as being able to access to financing. That is why we give you 5 reasons to buy a pre-sale home and get over the fear of investing.

1. Best priced properties

As mentioned before, one of the most important advantages of buying a pre-sale home is that you can acquire a residence at lower price than it would normally cost. This does not mean loss in value, but quite the contrary.

For example, imagine you are acquiring a pre-sale home in the north of Merida, the area with higher capital gain. Regardless of whether it is a residential lot, industrial lot or a house, by acquiring a pre-sale property, you will get it at a lower price than other properties in the same area, and eventually, property value will increase due to the capital gain.

In other words, you get a good deal: you have the opportunity to buy a property with ‘discount’ but it will also increase in value over time.

2. Increased return on investment

Buying a pre-sale home increases return on your investment. As explained before, when you acquire in pre-sale, property value will remain the same but you paid a lower price.

In the previous example of buying a house in the north of the city of Merida, although you paid a lower price, property value will increase over time, so the investment you made at the beginning (what you paid for the house) - will generate almost immediate returns.

Now imagine you acquire an apartment in Riviera Maya, one of the top destinations in Mexico. You will be acquiring a property at a lower price with capital gain on the rise, but you also have the possibility to see the higher return on your investment thanks to tourism: you can rent your property to travelers who want to enjoy Riviera Maya on their own.

5 reasons to buy a pre-sale home

3. Added value

As mentioned before, capital gain of pre-sale developments is generally on the rise.

Once the construction is finished, property value will be higher, especially when you buy a house or apartment in an area with high capital gain.

As mentioned in 5 reasons to invest in Merida, the north is the area with the highest capital gain thanks to the fashion malls, shops and exclusive services located there. If you want to acquire a residence in the north, you will find that prices are higher compared to other areas of the city like the south or the east of Merida.

In the end, capital gain depends on the area, location and elements that are not directly related to the property - such as services and establishments around it - and the construction process does not affect property value at all. So, you can buy a house at a great price, knowing that property value will be higher thanks to its privileged location.

You should also consider that part of the reason why capital gain is on the rise is because nearby areas are also growing.

If you have already read our definitive guide for the real estate investor, you know that you need to think long-term before investing in real estate. It’s very important to check the development plan of the city where you want to invest your money.

Going back to the example of Merida, even the inhabitants are surprised by the growth registered in the last 3 years. The same applies to Riviera Maya and Tulum, which have become top destinations in Mexico, surpassing even places like Mexico City.

That is why we emphasize how important it is to acquire a pre-sale property: you can secure your investment and increase your returns.

Many people use waiting time to plan their move, and in the case of foreigners, get everything ready for retirement.


4. Growth opportunity

Acquiring a pre-sale real estate development is a growth opportunity.

You can choose the lot, house or apartment that best suits your needs. This is very important to ensure return on your investment, as well as your comfort.

There are people who prefer to own properties located at residencial entrances, while there are investors who prefer houses located in the corners.

Although everything depends on your reasons for investing in real estate: either as a family inheritance, for retirement or to own a rental house, the truth is that in real estate, the most important thing is to make the best investment and the key to achieve this is choosing carefully the place to invest.

Even if the area where you want to invest has high capital gain, the location of the property -if it is a corner house or it is near the avenue- is a factor that increase the return on your investment.

An additional benefit when acquiring a pre-sale house or department is that you can be one of the first owners to choose its location, so you will have more options to choose from.

And mentioned before, waiting time is an opportunity for the area to grow with new shops, schools, hospitals or exclusive services to enjoy a better quality of life for you, your family or your guests.

On the other hand, there are those who use this waiting time to plan and get everything ready for their move: whether they are retirees, newlyweds or people that want to move but still need to plan it.

5.Low maintenance costs

One of the advantages of acquiring a pre-sale home is that properties are new. This will help you avoid maintenance costs that you would be necessary when buying old properties.

When you buy a pre-home, you have the assurance that high quality building materials are being used in the construction. Do some research before buying a residence: it is very important to learn more about real estate agencies or construction companies -their experience and real estate developments-, in order to have more confidence in your investment.

New pre-sale properties feature facilities such as washers, dryers or air conditioners. On the other hand, an old house may not have the same facilities as a new one, and in the end you will have to pay for the additional expenses.

Some people who are starting to invest in real estate still have doubts about maintenance fees. In general, real estate companies set these fees for the maintenance of amenities and usually they can be paid once people move into the residence.

Well-kept areas such as parks, green areas and courts allow residents to enjoy a quiet life, with the reassurance of knowing they are living in an area that improves quality of life.

Why buying a pre-sale home is the best investment?

In short: acquiring a pre-sale property will help you improve your investment.

Not only are you guaranteeing that property value will be higher when your house, apartment or residence is finished, but you will also have get it for reasonable price before it go on sale to the general public.

Remember that while a property is one of the safest investments you can make -especially because it will increase in value over time, pre-sale residences give you the opportunity to get greater returns.

Before acquiring a pre-sale property you need to verify that the real estate developer is reliable and it has experience in the area where you want to invest. It is also important to think long-term.

In conclusion, do not be afraid to ask about construction materials or request further information about the development. Do not miss the opportunity to acquire a property at a lower price, especially if its is located in an area with high capital gain. That will guarantee your investment.

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