DOMO BUSINESS DOMO HOME Investing in Preconstruction Real Estate in Brazil
Investing in pre construction condos, homes, or town houses is a strategy which has been popular among real estate investors for quite some time. Pre-construction real estate investing is purchasing a property (condo, town house, home, condo hotel) after it has been planned by the developer but before it has been built. Developers will sell you their preconstruction properties 30% below appraised value if you commit to buy before the construction has been completed.
Developers give this discount to pre-construction investors because it helps the developer to secure financing on their project from the bank. To reduce the bank's risk, developers will sell some units in their project in the preconstruction phase. The earlier you buy in the construction process - the bigger the price discount. In addition to this price discount, the developer may give you some other financial incentives such as free upgrades or paid real estate taxes for one year.
Because it may take some time to complete the construction of the new property, the value of the preconstruction real estate may appreciate during this time. This appreciation means an even higher return on investment for pre construction investors because not only do they get built-in equity by buying below market value but also additional equity by riding the appreciation wave during the construction phase.
After the construction is completed, preconstruction investors have multiple options to exit from their real estate investment. They can either sell their property and cash out or keep the property for long term investment and get rental income. Sometimes investors can assign the contract before closing to a different investor for a quick profit.
Pre Construction condos, homes, town houses and condos are more suited for this investing strategy. This is primarily because these types of real estate are in higher demand and sell quicker. Preconstruction investing is more popular in locations with higher growth, such as along the beach (oceanfront views), downtown, close to resorts or theme parks, and even next to casinos. Some of the real estate markets which are currently popular in Brazil are São Paulo, Rio de Janeiro, Curitiba, São Bernardo do Campo, Santo André, São Caetano do Sul, Florianópolis.
For more information:
http://www.catenaecastro.com.br
http://brazilrealestate.catenaecastro.com.br/contact
