It’s not always easy to find affordable beachfront property, especially in the United States. Many of the premier spots have long ago been discovered and developed and the deals are long gone. However, one of the ways you can get great deals, even in mature markets is to find preconstruction beachfront condos for sale. Condo units that are in preconstruction will be significantly discounted compared to what they will be when the units are finished. Buying a preconstruction beachfront condo isn’t for everyone and there is a degree of risk involved, but most astute investors can make huge returns with them.
Condo units that are in preconstruction are priced at such a discount because the developers that are building them need funds for construction. This is for many reasons. Banks generally require at least a degree of funding before they will issue a loan to develop a property. Developers want to get to this number as quickly as possible so that they can break ground and ultimately sell their units and make a profit sooner. Because of this, they’re willing to offer significant discounts to people that are will to share the risk with them.
Despite the big discounts, buying units in preconstruction isn’t for everyone. Specifically, it is great for people looking to invest, but not a great option for people who want the home for their own personal use. Investors can use the property to flip or as a rental property. Because of this, the unit only has to be something a certain demographic or the general public will like, not something that the individual investor has to like and live with every day. You also generally won’t be able to move in for a year or two, a time frame that will discourage many individual property owners.
If you’re an investor, buying oceanfront condos in preconstruction is almost like buying an option. Because you only need to put down a small amount of the final price at the beginning, usually around 10% of the final price, you stand to get huge returns, or lose the 10% you invested if the property market collapses. Since most of your gains in preconstruction investment will come from this leverage that you can receive, it’s imperative that you study the market before you put one penny down. Here are the things that you should look for in a good property market.
The first thing that you need to look at is the oceanfront condo unit itself. Is it something that the general public will want to buy? What is the target demographic that you can expect to sell or rent the property to? Why would they want to rent this property. Before you buy any property make sure that you know exactly who you’re planning on selling or renting the condo to and why they would choose your condo over other locations or even other condo units in the same area. You should have a firm answer to all these questions before you continue.
While you’re investigating who will buy the beachfront condos that you’re looking at investing in, also do a through backgrounds check of the developer that’s in charge of your property. The developer should have a strong track record and be in good financial condition so that you can be assured they can get the building done without running into financial trouble.
Next, look at the other building supplies in the pipeline for your area. What other condo buildings, housing developments, or other infrastructure will be in place when your condo unit will be ready that can impact the property value of your unit. Ideally, you want to find an area that has improving infrastructure to attract more people or make it easier to get to but some kind of constraint on development, making sure that supply is limited.
Finally, especially if you’re looking at buying property outside the U.S., the local property market should be fairly liquid. This means that there’s lots of buyers and sellers and there aren’t any major obstructions to buying or selling property. In some countries there are restrictions on foreign property ownership, so make sure you take this into account before you sign your final papers.
Where you’re looking at investing in preconstruction beachfront condos, there are several things that you should look for. First, make sure that you know who wants to buy your property and why and the financial state of your developer. Next, look at the market. The market should have several characteristics to make it a good investment. These include a abundant supply of buyers, supply constraints, liquid transactions, and of course an appreciating market. If you follow these tips you should be well on the way to finding amazing cheap condos that can net you a nice healthy return once construction is finished.