Residential real estate investment is one of the best strategies for diversifying your investment portfolio. The real estate market in general has low risk and high return on investment compared to other asset classes. When buying a residential home, most buyers always find themselves in a dilemma of choosing between a resale home and pre-construction homes. Each of the two options has its own pros and cons and the decision to settle on either should be informed by homebuyer goals and objectives.
Pre-construction homes just as the name suggests refer to homes that are bought prior to the construction of the actual physical home. The most common form of pre-construction homes is a condominium in new buildings that are still under construction. In this post, we are going to discuss the major benefits that come with buying pre-construction homes.
- Easy to custom build and design
Having the power to customize a pre-construction home to your preferred taste and preference is one of the major advantages of purchasing a pre-construction home. You can decide on the type of flooring, plumbing works, cabinetry, lighting, appliances, and fixtures to use. When you customize, you end up with a home that has unique and high-quality finishes.
- Low initial Pricing
Pre-construction homes are usually priced at a very affordable rate because they are still under construction. If you don’t have sufficient funds to match the market rates for a ready-to-move-in home, investing in pre-construction homes is the best option.
For new investors, pre-construction homes are the best avenue to get into the booming real estate market. Home value for new homes will always appreciate and you are likely to make high returns on your investment in the future.
- Possible ready financing options
When you purchase a home through a reputable builder, they will organize a customized financing option that will suit your current financial status. Most builders apply for mortgage subsidiaries and you are likely to get financing with flexible terms. This is not the case when you go to the traditional market as you will have to spend a lot of time engaging different mortgage lenders.
- No repairs or improvement costs
Repair and improvement costs can be too high than initially thought when you decide to buy a fix-upper real home. You will also spend a lot of time before the house is redesigned into a new shape. However, with pre-construction homes, the builder is obligated by law to offer a warranty of the new homes.
This type of warranty caters to any repairs and maintenance of various home systems such as electrical, heating, plumbing, lighting, and others for a period of two years. Builders of pre-construction homes incorporate the latest building technologies to ensure homes are durable and of high quality.
- High resale value
Another great advantage of purchasing a pre-construction home is the high return on investment. If you will feel the need to sell your home later, you will realize that it has increased in value. Therefore, your investment will have paid off in addition to giving you a place to call home or renting out. The return on investment is usually high thanks to the low purchasing prices that most builders offer for pre-construction homes.