October 25th, 2011  Posted at   Constructions
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The pre-construction purchase process or PPP is structured a lot differently than purchasing a property that is already in existence. With pre-construction real estate you are essentially purchasing off a floor plan. This can prove to be a complicated task as you cannot essentially experience the product. Even though many condo sales offices in Toronto have managed to create model suites to reflect what certain units look like, you still don’t get the true effect as you would purchasing an already existing unit.

Once you have chosen the pre-construction project you would like to purchase in as well as your floor plan, it is time to sign your life away! The agreement used for pre-construction condos is much different that your standard resale agreement. Don’t be scared when you see the agreement as it is significantly longer than a resale agreement. Some can run up to 30 pages long. What is unique to the pre-construction purchase process is that the builder gives you a 10 day “cooling off” period. It is in this time frame that you will have your lawyer review your agreements on your behalf. Once this 10 day period is over and your lawyer has given you the ok, you must submit the remainder of your post dated deposit checks to the builder. This normally accounts for approximately 20% of your total purchase price.

A few years later

By this time the building has started construction and you will get called in for color selection. It is at this time that you will start choosing the colors of your finishes and features of your condo. Most developers also give purchasers the opportunity to pay for upgraded materials at that time if that is something they would like to do. Approximately a year (or so) after the color selection process, you will be given the keys to your brand new suite. In real estate terms this is called interim occupancy. Even though you don’t have title to your unit, you are living in it and paying what we call “occupancy fees” to the builder. This number reflects a portion of your taxes, maintenance fees and interest on the remaining of the balance owed. You are allowed to rent out your unit during the occupancy period, but be aware that you will not be eligible for your GST rebate if you choose to do this. Occupancy can last up to one and a half years. Once the condo building registers with the City of Toronto your lawyer will make the arrangements to exchange title to your new condo for the outstanding payment as agreed in your agreement of purchase and sale.

Unlike purchasing a condo that is already in existence, the pre-construction purchase process is a long one. The majority of the time you are purchasing some 2-5 years in advance. Even though it is a long waiting period, the benefits can be very rewarding financially when you purchase in the right location, with the right builder and at the right time. Read more… »

October 24th, 2011  Posted at   Constructions
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If you love extreme activities and sports and want to get involved with real estate, consider getting involved with pre-construction properties. Profits in the pre-construction business are very high but the risks that are involved are high also. The maximum highs and lows in the real estate business are often seen under the umbrella for pre-construction profits. Many well-known investment names have made their fortune via speculation as well as pre-construction sales.

Before you go any further with this idea… there is something you need to remember about this little venture. Your profits in this area can be quite high; yet, so are the risks. This is tentative real estate and when the bottom falls out and the bubble bursts, people who have invested lots of time and money into it can lose a lot. It’s always best to err on the side of caution; however, if you’re a gambler, it’s a risk you may want to take.

What Is Pre-Construction Real Estate?

Many people don’t understand what it means by pre-construction real estate. It’s understandable that it this phrase is confusing; after all, it can have several interpretations.

The first interpretation is pretty obvious: you’re purchasing real estate before the construction of the property is done. When the real estate market is sizzling, you’ll want to buy your property before the project gets underway especially if you’re looking for low prices that will give you the high payoff down the road.

After you’ve made the buy, you can look for potential buyers for your property. Real estate markets in the areas of Las Vegas or beachfront retirement property in Florida tend to change hands several times before a unit has been complete. Each buyer will have something from the purchase; usually the earliest investors will have the largest purchase piece going home with them.

Why does this happen? Contractors will try to get financial support for these buildings; in order to do this, they must have several of them sold so the bank will determine the market is adequate enough to give them the money needed to get the property built. For that reason, the investors will purchase these units for very little money. After all, the unit hasn’t been built or even approved for construction. These investors are buying an idea for property… not the actual built property. As the construction nears completion, the property value will increase drastically (especially for property in high demand areas). For those investors who managed to hold on, the profits are well worth it.

The Risks Behind Pre-Construction Real Estate Investing

There are many risks that go along with this kind of investing; so much can go wrong with a project like this. One problem includes housing demands being met before construction is through on the property. This is an ongoing problem. More problems that can hit this kind of investment are an economic crisis, business closings, recessions and more. When this happens, anyone who has a piece into the property can be left wondering what to do next and losing their money, too. They may even lose the investment entirely. Projects such as these tend to take lots of time to get done; another big reason they are so risky. Anticipating what the economy will be can be hard for a project like this.

However, if you are able to see it through to the end, investors tend to make a return of greater than 100 percent; a big reason as to why pre-construction real estate investing is a popular area… no matter what the risks are. Read more… »

October 24th, 2011  Posted at   Constructions
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One of the most important factors affecting the potential for increases for prices of Mexico land for sale in the Tulum real estate market has been the upcoming international airport. The most recent progress of this airport has been the upcoming announcement of the company which will construct and operate the airport.

Specifically, in early February, Mexico’s federal agency to ensure fair competitiveness, COFECO, voted not to allow ASUR (Grupo Aeroportuario del Sureste SAB de CV) from participating in the bidding process. The reason for the decision is that this same company operates the Cancun International Airport, about 2 hours away, which is the only other major airport easily accessible from the Riviera, which stretches from Tulum to Cancun, including Playa del Carmen.

The move comes to ensure competitiveness between the two airports, offering the best prices to tourists and residents of Tulum and nearby areas. This fact is a benefit for anyone buying Tulum real estate for the purpose of retirement, vacationing or relocating to Mexico for any other reason.

On the other hand, Tulum land for sale is likely to benefit either way. Existing land developments along the Tulum-Coba highway are already seeing future benefits in their planning stages; recently, a new bypass was announced which would provide a highway route around the town center area, through which the current highway passes; this bypass will provide the access to the airport as well, which is located very near to its intersection with the Tulum-Coba highway. When this bypass arrives, residents of homes they build on their land will have easier access to Playa del Carmen, Cancun and the future airport. They can also expect to see prices rising – even more so when as the airport itself advances through planning stages.

ASUR reported that they would begin an appeal process, pointing out that they operate at very accessible prices, with Cancun Airport costing an average 134 pesos (12 dollars) per passenger in airport fees. This fee is set every five years by Mexico’s federal Ministry of Communication and Transportation, and therefore would not be affected by competitiveness, claims ASUR.

The capacity of the Cancun airport is currently 30 million passengers, and the new airport in Tulum would be another 15 million. ASUR has invested just under a billion dollars since the company’s privatization, to modernize and expand the structure of the nine airports that manages and, in particular, in the Cancun airport has received well over half that amount. For two consecutive years Airport Council International (ACI) has named the Cancun Airport as “the best airport in Latin America and the third best in the world.” Read more… »

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