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Posts Tagged ‘Buy’

Interested in getting in on the condo hotel trend? Perhaps you’ve heard about this new type of vacation home ownership, and it sounds right for you. After all, a condo hotel unit is typically located in a great vacation destination.

It’s in a three-star or higher property. And a management company takes care of all the hassles typically associated with ownership, including finding renters when you’re not using your condo hotel unit.

Buy Condo Hotels in Pre-construction Phase

With many new condo hotel properties coming on the market, when is the best time to buy? The answer is easy. In pre-construction. That’s right, most condo hotels begin selling their units long before the property is built, and often before even the first shovel-full of dirt is overturned.

A Deposit Holds Your Condo Hotel Unit

In some cases, you simply place a reservation with a deposit of usually 10% to 20%. The deposit goes into an escrow account of the developer.

The funds are invested in a low-interest passbook account, and any interest paid on the account (usually minimal) is applied to the purchase price.

You can expect to go to contract once the developer has sold enough units to meet lender requirements (usually about 50% of the total number of units?) and has applied for his construction loan.

At that time, your reservation will be converted into a hard contract, a binding agreement. Depending on the recission period of the individual state in which the property is located, you’ll typically have 7 to 15 days to decide whether you want to proceed with the purchase or cancel.

The Construction Process

How long does it take to build a condo hotel? Well that depends on a number of factors such as whether the property is to be built new or whether it’s a conversion of an existing hotel or resort, the weather and the permitting process. Generally, for a new property, it takes close to two years to build; conversions take six months to a year.

Appreciation Makes Pre-construction Appealing

Some people wonder why they should buy in pre-construction. After all, your deposit monies are tied up for one to two years. The answer is you get in on the ground floor when prices are lowest and unit selection is greatest.

As the condo hotel is being built, it is gradually appreciating. Developers implement planned price increases at various stages of the selling process. If you purchase your unit at a pre-construction price, it potentially could be worth significantly more at completion. When you sell, that translates into a higher profit for you. The actual profit of course depends on the general market conditions, interest rates and competition.

Many people prefer to buy an apartment than to rent one. This has its long term advantages and can give your money’s worth. It would be better to pay for something that you already own than to just pay for using some facilities and end up not having anything in the long term. However, buying an apartment in the city may require your attention and time since this is a major life decision. You have to be guided by some tips and rules to be able to come up with a wise decision of whether to buy the apartment or not.

Tip #1: Know your budget

You have to set out how much you can afford. You should not only include the total price but also the closing costs, insurance, tax and other incidental expenses. Sit down and write a budget that works for you. You cannot at impulse buy an expensive property and end up not being able to meet the monthly requirements or initial cash requirements. Set these things out and work within what you can afford.

Tip #2: Take some time to find the apartments for sale in your city.

Check on newspapers, local magazines and announcements. Take a walk, a drive or a tour of the city and just be on the lookout for signs or announcements of apartments for sale. This way, you can easily assess the neighbourhood and decide quickly if you like the community or not. If you find an area that interests you, you can get the contact information and call or inquire online. Better yet, you can inquire directly by checking the place yourself. If you like the place, list the place down as one of your options and go on with your next search.

Tip #3: Set a schedule for your search

Sometimes you will just find yourself with many options and you may not know when to stop searching and considering these options. You have to set a limit or a timeline. If you are not concerned about time, you may continue on searching but you have to note that those that you already have considered may be sold sooner than you think. You have to make sure that if a property already meets all your requirements, you can start with the next step of negotiating to communicate to the owner that you are serious with your intention to buy.

Tip #4:

Avail of the services of a real estate agent if you are finding it hard to find the best place for you. Real estate agents have databases of listings that are for sale and they can easily help you with your search process. You can even make them work within the parameters and bounds that you will specify. This is easier. It may cost you more than doing things yourself but the amount of effort that you have to do will be lessened and you can make use of your time for some other productive purposes.

Tip #5:

Check on the payment arrangements if you already have chosen a property. Make sure that your credit history and rating do not have problems. These can affect the status of your purchase. If you know that you have problems with your credit rating, you can first pay off your debt or consider options of using a co-maker. Your real estate agent may have recommendations on how to better address the problem.