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Re-Sale Home or Pre-Construction Property?

You’ve made the decision to begin looking at International real estate, maybe you’ve even decided on a location! But now that it’s coming down to looking at actual property, you need to decide if you’d prefer to purchase a home that’s already built and ready to be moved into, or purchase an empty lot for a possibly stronger return on investment.

Let’s have a look at the positives and negatives of both options:

Positives: Re-Sale Home

  • When you’re looking at an existing home, there’s no guesswork. You’re getting exactly what you see – home layout, room sizes and views. Plus, you can chat with your neighbors.

  • Similar to North America, you typically get more bang for your buck with an older home. Larger space both inside and out, and chances are you'll pay less per square foot.

  • Typically the seller will include items such as lighting, air conditioning, window treatments, etc that you won’t have the opportunity to include in a new build.

  • It’s “plug-and-play” – you can either move in right away or begin renting it out right away.

Negatives: Re-Sale Home

  • You may not get exactly what you were looking for and have to compromise in certain areas where a builder could have given you options.

  • The closing date will be within a much shorter timeframe and chances are you will have to pay in full at closing. It’s difficult to secure financing in most markets and foreigners are often charged unprecedented interest rates.

  • There’s a good chance you will need to do some repairs to an older home and the odds that they will be covered by a builders guarantee are slim to none.

  • Depending on how old the property is, it likely won’t reflect current décor styles, which can affect your resale value if you’re looking to sell near-term.

Positives: Pre-Construction Property

  • If you purchase early, you have the option to choose pretty much everything – layout, finishing’s and landscaping. You can usually also choose your paint, counter tops and tile colors and styles. As long as you get in early enough, you will save a considerable amount of money as opposed to waiting for a home to be completed and then buying.

  • You have financing control. Typically, you are only required to pay up to 30% in stages while construction is being done. Strong profit margins are available to you if you choose to sell prior to the project being complete. In addition, most developers offer financing, providing even more leverage.

  • Similar to purchasing a new-build in North America, most builder’s will provide a warranty that will cover faults in the property.

  • You’ll avoid a possible bidding war, which can sometimes happen with re-sales. If you’ve paid the developer, they will hold the property for you while you complete your due diligence.

Negatives: Pre-Construction Property

  • This is where it’s extremely important that you trust your developer. You’re essentially purchasing an artist’s sketch of your home. Not a big deal if you’re flipping the home or renting it out, but if you plan to live in it, that’s a different story. It’s always recommended to view other homes your developer has built/is building and chat with people already living in the development.

  • There are definitely larger returns on a pre-construction property, but there is some risk involved. If your projected finish time is a few years off, you’re banking on the fact that property prices will rise or that there will be a strong demand for rentals.

  • You are also relying on the fact that your own personal financial situation won’t change. It’s important to keep in mind where you’re purchasing; who you’re purchasing from and that you will have the resources to close the sale when your home is complete.

  • If you’re purchasing a condo, keep in mind that the fees are only estimates. It’s impossible to know exactly what your final monthly fees will be until your unit is finished.

  • Be prepared for there to be a delay on your closing date. It’s common for pre-construction projects to run behind schedule.

In the end, the decision of purchasing a re-sale home or a pre-construction property is entirely up to you and what your final intentions are. If customization is your preference, pre-construction is the way to go. If you’re ready to move or start renting now, a re-sale is likely more up your alley. Regardless of which way you choose to go, always complete your due diligence before making a final commitment.

The developers we represent offer a variety of choices... some have homes that have been lived in and are ready for re-sale, others have homes or condos that are being built as turn-key (a customizable alternative to buying a re-sale). The best way to see what's available is to visit on a Discovery Weekend! Go HERE to learn more now...

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Where International exists to recommend a variety of International real estate options. Where International requires developers to meet stringent criteria before offering them to you. Conversely, any inspections we conduct on projects or individuals should not be misinterpreted as a guarantee by Where International. International real estate is not immune to the ups and downs that occur in North American real estate; property values are never guaranteed to increase.

Where International is not accountable for the orchestration or deliverance of Discovery Weekends. We provide them to you on behalf of our developer partners. We recommend that you purchase travel insurance, as you would with any trip out of your home country. In addition, we advise you complete your own due diligence, purchase title insurance and always use a local attorney to assist with all transactions. In the event that a reader purchases a property from a recommended developer, Where International receives a sum from the developer.