Investing in a pre-launch property, whether it be a house, condominium or apartment building, can be a risky move. Some people thrive on these types of risks, though, because it means saving a lot of money when going through the initial investment process and gaining more money after you sell it yourself. It is very similar to investing in high-risk stocks through the New York Stock Exchange trading company. Buying a stock, or in our case, a property, on a discounted rate is something that is comparable to the adrenaline rush that you get when swooping down a 45% roller coaster embankment at 60 miles an hour. Needless to say, the experience is thrilling if not a bit frightening to some. The potential investor must have the stomach for such an action as a new launch property investment.
Tips for Investors
• Enquire whether or not the developer has free and clear ownership of the land for which the investment property is being built.
• Enquire about whether or not the developer is in compliance with an Intimation of Disapproval or IOD. This set of instructions is the builder’s guide to legally construct the investment property. The IOD is only valid for 1 year and if the property is not completed during this time, the set of instructions must be renewed for the continuation of the project.
• Make sure you know who you are taking a risk on. You do not want to pour your money into a black hole of hopelessness. Check the developer’s credentials and building record to be more sure of where your money will be sitting for the next year or so. Is the builder well-established and if not, does he have a good track-record so far?
The reason for which investing in pre-launch property sales is so risky is because most developers end up having to wait for a year or more to get proper approval before they can actually start building what buyers have invested their money in. Though pre-launch investor usually get a great deal when buying these particular properties, money is still money and buying any property is, non-the-less, an expensive endeavor. Property investors who could really use the pricing advantage of a pre-launch property and can wait a year or two before being able to have full possession of their purchase, are the ideal candidates for these types of high-risk investments. A sales of one of these properties is risky because the developers have not had approval to make the build and the cost of the development can become very expensive the longer it takes to get started. So, buying the not-yet-built property can save the investor a bunch of money in the long run.