Why are presale prices so much better?
We are seeing such an increasing interest in second homes here in Playa del Carmen that is amazingly growing fast every year. There is a growing recognition; a home in a beautiful destination allows us to take time from our busy lives to focus on health, family, and friends.
If you, like many others, are considering the Riviera Maya as a place to invest, have your vacation, to relocate or even retire, the choices can be surprising. The Riviera Maya is a wide region on the Mexican Caribbean that goes all the way from Cancun, Puerto Morelos, to Playa del Carmen and Tulum. There are over 75 miles of spectacular beaches and jungles, and it is home to the world’s second largest reef.
Real Estate offerings in the region of Riviera Maya are equally extensive. The key to a successful and happy lifestyle investment is to define what type of real estate best suits your personality, price range, and location.
Some important questions you may ask yourself are:
- Are you an eco-jungle lot type of person?
- Do you prefer luxury master planned gated golf/beach communities with brand name spas, restaurants, and shops, kid leather glove service and amenities?
- Are you a do-it-yourself kind of person, seeking the ultimate creativeness, remote beach-front for a dream home?
- Or do you look forward to some space near the beach, in a community of single homes?
Many prefer the most convenient, “use and lock and go” condominium, in the downtown beach area.
These questions are part of any good needs analysis conversation with your realtor, which forms the foundation of your buying process. Following the discovery of the property type and location that’s best for you.
Many people want to understand the difference between investing in a presale (pre-construction) purchase of a land development, a home, a condominium, versus buying a property already built. While this decision is very personal based on goals, price range, and personality, there are a few considerations to help you make the right decision for you.
When to Buy in Riviera Maya?
In the case of presale (pre-construction), the idea of getting in early on any development appeals to investment people, who are focused on capital appreciation. Typically, pre-sale works well for visionaries, the people who can see a project come alive from the floor plans, while there is still dirt on the ground. The idea of pre-sale is that it offers maximum capital gain to the buyer at the early stages. Prices are usually lowest in the beginning of the sales phase and at the beginning of construction, and they increase over time as construction and sales progress. Prices reach their peak at completion. During construction, the corresponding housing market values (hopefully) usually increase, giving the initial buyer an automatic capital appreciation.
In presale, down payment go from different ranges from 20% to 70% of the purchase price is payable upon the signing of the contract, with the balance due at completion of construction and “physical possession” of the property. Thus, any capital appreciation is gained with only 20 or 70 percent on the dollar.
There are additional benefits of purchasing during presale that may increase the return on investment for an early bird buyer. It is not uncommon to see a 5% – 10% discount on published prices for the first 15 buyers or a huge down payment. This provides a great return on investment.
Remember, however, that pre-sale purchases have some other considerations. The time frame from when you sign the purchase contract and make the initial down payment to the time you actually move in, can pass 2 years. There can be unexpected delays and changes that require the ability to weather these uncertainties. As long as you look at the property acquisition from a long-term perspective, it will likely remain a solid investment.
It must also be noted that the initial down payment flows through to the developer and is not held in escrow. Therefore it is of higher importance to consider the financial stability of the developer, the underlying title and permits involved, and the protections provided in your purchase contract. We highly recommend local lawyers, for your benefit, should review all these.
Last information to consider on presale property purchases is the delivery of the title of ownership. Even though you may have taken physical possession of your condo or home when it is complete, have paid for it, the title of ownership may take from 6 months or over a year to be delivered to you, but don’t worry that’s normal, just make sure you got your title.
The idea of purchasing something already built is a safer decision for many people, besides the title of ownership is immediately transferred in your name and uncertainties are removed.
Everyone has different perspectives, visions, and goals. Here in Playa del Carmen, we have something for everyone. Will you take the luxury of time to come and see us here?
Please visit our page Coco Beach Real Estate or pass by on 5th Av. Between 40 & 42nd street!