You have recently put a property on sale and are looking to make another investment. Only you aren’t quite sure what to invest in. You have been eyeing preconstruction units, yet, resale ones also seem like a good option. If only it were that easy to make up your mind. The preconstruction vs. resale property battle is an ongoing one. Lucky for you, today we aim to declare the winner for you!
Investing in Preconstruction vs. Resale Property: How to Decide?
Despite being one of the most significant stressors in life, moving at the moment seems a seemingly easy process compared to deciding whether to invest in a preconstruction or resale property. After all, pros can handle every task associated with your relocation. Should you choose to take one of their services, that is. Meanwhile, it’s up to you and up to you only to figure out what type of housing would better suit you. To simplify the decision-making process, we thought we would introduce you to a few factors that might influence your choice. Without further ado, let’s see what they are!
Caption: There are several factors to remember when deciding between a mid-building property and one that a previous owner is selling.
Alt. tag: A building mid-construction
#1 Ease of Customization
Before making up your mind, it’s crucial to consider your future home in terms of customization. Do you feel comfortable making changes, or would you prefer to buy as-is? If the first seems favorable, you would be better off investing your dollars in a preconstruction unit. Why? Well, because it allows for more freedom regarding customization. Having not yet been fully finished, such a unit is like a blank canvas. One that you can shape to your liking. You are the first to enter it, making it your kingdom.
When it comes to resale units, well, you may encounter slight limitations. Certain features, like, for instance, flooring or the layout, will have already been decided on and won’t be as easy to alter. Furthermore, depending on the year of the build, they may also prove old-fashioned.
#2 Upkeep Costs
Regarding preconstruction vs. resale property, we cannot but notice that the first is a definite winner regarding maintenance costs. Since the development is still underway, there will be no such costs for you to worry about. You’ll only cover them once you are officially handed the keys and have finally moved in. However, as you’ll be the first occupant, chances are upkeep expenses will be minimal for the first couple of years.
On the other hand, if you were to become an owner of a second-hand home, know that the probability of having to pay for maintenance costs becomes higher the older the property is. That especially holds for fixer-uppers.
#3 The Budget
You cannot expect to purchase any property without steady finances. A home is a costly purchase. Unlike everyday purchases, you cannot return them should you realize you have made a mistake. That’s why, before you’ve closed the deal, you need to figure out whether you have the budget needed to finance such an investment. If you are taking a mortgage, you must determine if you can pay it off. Also, acquiring a preconstruction unit differs from acquiring a resale one in terms of finances. Although it may seem unbelievable, buying a property that hasn’t been built yet means you’ll have to set aside less money for a downpayment. Furthermore, as you cannot move in immediately, the waiting period will allow you to save even more funds, thus ensuring financial stability.
Caption: Preconstruction vs. resale property – which is better to invest in? In terms of finances, the first one might be more viable.
Alt. tag: A person counting money to decide between preconstruction vs. resale property
#4 The Waiting Period
If you want to settle into a new home as soon as possible, preconstruction isn’t the type of property to invest in. Instead, it would be best to consider putting your money towards resale housing. Of course, how much time it takes you to move into it will depend on the property’s condition. Generally speaking, if the goal is to move in as soon as possible, you need to look at homes in sound condition. Or rather, ones that don’t require significant investment to turn livable.
As their name suggests, preconstruction units haven’t been constructed. You can only inhabit them once the works have been completed. We understand this may seem like a con to specific individuals. However, as previously explained, you can save funds while waiting to move in. Does that sound like a fair bargain?
Caption: If you are looking to move in asap, resale properties are the ones to go with.
Alt. tag: A building already constructed featuring several resale condos.
#5 Profitability
It’s only natural that unfinished property would be more affordable. What’s good about it is that it will have risen in value while you wait for the construction to be over. Suppose you were to resell it there and then; in that case, you will have profited from the sale.
On another note, resale properties have already been appreciated. Their value will continue to increase. How much exactly will depend on factors you may or may not be able to influence, including home features, location, amenities, etc.
#6 The Location
And that brings us to the final factor to remember when deciding whether to purchase a unit in the making or a second-hand one: the location. The construction site may be unsightly at the moment. However, that’s soon about to change. Look at the bigger picture. What does the nearby area have to offer? How close is the nearest school, hospital, or police station? Furthermore, is the property in a developing area that may provide newer, better amenities?
When it comes to resale housing, the advantage it holds over preconstruction is that everything is already built. There’s no noise to keep you awake at night. In addition, you already know the area without relying on visuals to paint a picture.
To Put Money Towards Preconstruction or Resale, the Question Is Now?
Having read the above, we hope you realize who the winner of a preconstruction vs. resale property debate is. We might be leaning a bit towards the preconstruction simply because there are fewer costs involved in acquiring such housing and, later on, maintaining it. Furthermore, by investing in one, you are given absolute freedom — customization-wise. Nevertheless, should you opt to purchase a second-hand home, we won’t judge. There’s no wrong or right choice, after all. Only one that’s better suited for you.
Meta description: Preconstruction vs. resale property – which one would you be better off investing your money in? This article may help you make the decision.
KW: Preconstruction vs. resale property
Photos used:
https://unsplash.com/photos/BIeC4YK2MTA
https://unsplash.com/photos/91AQt9p4Mo8