| Preconstruction real estate investments are | | | | deposit required by the developer in a |
| investments in 'yet to be completed' construction | | | | preconstruction property is around 20%. Therefore a |
| projects. Completion may still be six months, a year | | | | condo priced at $500000 will require a down deposit |
| or two years away; may be even more. An investor | | | | of $100000; half to be paid at the time of contract |
| is able to put in a small deposit to book/hold a condo | | | | and the other half at the beginning of construction. |
| or apartment in the project till it is complete. He can | | | | Based on a conservative estimate of 20% annual |
| then sell the property to capitalize on the price | | | | appreciation in real estate prices as per current |
| appreciation from the date of investment. | | | | trends, the under construction condo would be worth |
| The preconstruction investment is found quite | | | | $600000 after one year. This would be a straight |
| lucrative to most investors on account of its | | | | 100% annual return for the first year on the |
| simplicity and low risks. Since the investment is small | | | | investment. Simply stated, the capital invested would |
| and has to be made in cash, there are no mortgage | | | | double every year. |
| related hassles or expenses. There are no taxes | | | | Preconstruction investment is especially attractive for |
| involved and the investor just needs to sit tight and | | | | Miami real estate because of the influx of large |
| keep a watch to see that his investment keeps | | | | number of people into Miami including buyers from |
| growing with the appreciation in real estate prices. | | | | outside the US interested in taking advantage of the |
| Preconstruction investment in Miami is of particular | | | | flexible rules available to foreign nationals who want |
| interest on account of the rate of appreciation in | | | | to purchase Miami real estate. Waterfront property is |
| property prices over the last few years. It has been | | | | the most in demand, being preferred by such buyers |
| observed that the average rate at which real estate | | | | including those from States like New York and |
| prices have been rising annually in Miami has been | | | | California and others. |
| close to twenty-five percent. In the case of an | | | | Instead of rushing headlong in a preconstruction |
| investment in a constructed house for rental income, | | | | investment, it is very important to gain detailed |
| there is no need to manage tenants in a | | | | information before making the actual investment. This |
| preconstruction investment. And the absence of | | | | is because every developer or every property is not |
| mortgage related issues means that a developer will | | | | desirable from the investment angle. A project may |
| sell a preconstructed condo/apartment unit | | | | not be well analyzed or priced right. Therefore it is |
| irrespective of credit history ratings. | | | | best to seek the services of a local realtor to |
| On the basis of available figures it is safe to assume | | | | overcome such difficulties while making a selection |
| that investing $100000 in a $500,000 condo in a | | | | for the investment. Talking directly to the developer |
| preconstruction stage project in Miami can net in | | | | or his staff may not yield objective information. |
| $100000 in price appreciation in one year. The down | | | | |