With globalization and migration at its peak, the population of Saudi Arabia has expanded rapidly crossing 34 million, resulting in increasing demand for real estate. To cater to this demand, low-cost condominiums, townships, and subdivisions are sprouting up throughout the country in the past years. Condos and apartments are quickly becoming the main attraction in urban areas. Before you consider investing in a condo or an apartment, you should know the difference between a condo vs apartment. There are several ways to get into investing in real estate. But carefully investing in a pre-construction project, like condos, can be a smart decision since it has value for a high return especially in a developing country like Saudi Arabia.
We bring to you five reasons why you should invest in a pre-construction condos project.
- Lower Price in Comparison to other Real Estate Projects
In a relatively new real estate market, pre-construction condo investment is almost always priced below resale counterparts, which is why the pre-construction condo market has earned such a good reputation among investors. If you are going to invest then the best time to do it is at the beginning. That is usually when the best deals are offered and you usually end up with a greater opportunity at a much lower price.
- Assurance of Security
Before investing, one thing you need to take seriously is your personal safety. In this aspect, condominiums tend to provide a more extensive assurance in comparison with other real estates. Condominium security service provides professional security with a personal touch in verification and access control for visitors, monitoring security cameras, and emergency response. A safe community will instantly draw both condo investors like you and renters. Security also plays a vital role in the resale value.
- Lesser Stress in Investment
When you buy into a pre-construction condo you don't have to worry about qualifying for a mortgage and you don't have to worry about managing tenants until the building is completed. There are a large variety of condos big and small for all types of renters and investors. For example, people getting ready to retire or people low on savings that are looking to retire, condos are a perfect fit for this group. They are smaller, easy to maintain and are located in some of the best areas in an urban neighbourhood. Investing in such mini real estate ventures is a smart investment move with little stress and risk.
- Economic Benefits
One of the biggest advantages in investing in pre-construction condos is the ability to rent them out and have your tenants pay down your mortgage. Rental pricing remains steady despite major shifts in the economy, so your rent will get paid despite any outside market fluctuations. Another beneficial aspect of pre-construction condo investment is the leverage value. When you opt for a mortgage from the bank, the bank usually covers 80% of your expenses while you spend the rest 20%. You can pay back the bank over the course of a few years. The initial investment in pre-construction condos is down payment which you might not have to pay up all at once but in different stages. Thus you would have a track of your finances and complete control over it as well. You don’t have to worry about paying a fortune all at once.
- A Safety Net for Investors
Many times, when you are purchasing a resale condo or a real estate, the most desirable estates sell in heated bidding wars. This results in fraught with last-minute decisions that are entirely based on emotion and lack of research resulting in bidding a competitive offer with no safeguards or guarantees. However, this is not the case when you invest in pre-construction projects. You have what’s known as the 10-day cooling-off period. During this time, you can review the purchase information with your lawyer, lender, realtor, and financial advisor. You can use this time to do further due diligence on the builder and area. It is a far more safe process to evaluate your investment opportunity.
A Few Cautions before investing
- Scan for development that is in a good location. Go for an area that combines easy access to mass transit and within walking distance to essential amenities.
- Put your investment in established builders that have a proven track record.
- Scan for indicators showing potential future growth.
- Make sure you can afford to live in the condo after delivery: These include mortgage payments, property taxes, condo fees and insurance.
A smart real estate investment can be worth much more than many investors’ entire stock portfolios. But before you invest in the pre-construction market, you should always do your own research by evaluating the project and the areas connected to it. In a country like Saudi Arabia, currently on pace to become a dominant investment hub, investing in a pre-construction condo can definitely be rewarding.