How to Successfully Buy Overseas Preconstruction Homes

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This article explores the advantages of buying preconstruction homes overseas, the risks involved and some precautions to take.

The Advantages of Buying Preconstruction Homes

Buying preconstruction homes definitely offer great advantages. First you get to CHOOSE! You don't just settle for any kind of property; you can select design features and specifications. You can actually be involved in the design of your new investment. If you're a property specialist, you will be able to tweak some features and make the home desirable to prospective tenants.

Also, these kinds of properties offer the best deals. You get the lowest deals on pre-construction homes within the first two weeks of the project's launching. Buying a preconstruction home also means that you don't have to worry about repairs and maintenance. You may not have to perform renovation on a new home for the next five years.

Buying Preconstruction Homes Overseas Is Risky

Just as they offer great rewards, buying pre-construction real estate overseas can quickly turn out to be a sour deal. Hence these investments require foresight, research and an ability to think and make deductions like an investor rather than the average buyer. You should be able to determine where the neighborhood is heading in the near future and also make a comparison of project options within your budget constraints.

The biggest risk behind pre-construction houses is that it's a non-liquid investment. For the period in which the property is being built, which can be two to four years, in the case of condo units, you freeze up a large chunk of capital. Although you might have access to visual representations or projections, you're practically buying an invisible property. You've not seen the finishes or the outward finishes.

These properties also require more down-payment requirements than their resale counterparts and you can't touch your cash or pull out should you need your money. So, it is a risky proposition. How do you protect your investment in this case?

Rules To Follow When Buying Preconstruction Homes Overseas

1. Never pay the full price upfront on a pre-construction property. It's standard to pay 30% of the cost during construction and the rest on completion. You should pay the balance when the property is move-in ready and when you can transfer the title to your name.

2. Check the specification. Do not leave this to the developer. The more detail you add to your contract, the more likely you are to get what you expect. Detail all. Start with the exact size of the home, broken down by rooms and hallways, patios, balconies and storage space.

3. Time. Get a clear deadline for the completion and delivery of the property. Most developers do not finish as scheduled. But do not allow the developer to add a 12-month overload period and go scot-free. He should have to pay a fine if he’s unreasonably late.

4. Make sure you are covered if something goes wrong. The contract should give you a decent time frame for snag-checking, and outline what type of builder's warranty you get. Be sure to include a clause that covers what kind of steps you will take if you cannot resolve a problem with the developer, be it mediation with a trade body, arbitration or a lawsuit. In some countries, if the developer doesn’t complete the property, you will get some of your money. That is not the norm, though.

Buying pre-construction property can be very profitable when you’re in the right market. These rules will help put you on the right track for a successful purchase.

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How to Spot Hot Real Estate Markets

  • 13, May 2023

I’ve always been intrigued by the way surfers ride across the waves. The surfer waits long for a little sign, puts his gear in motion, gets into position near the peak and glides through with a small wave, trying to catch the big wave before it breaks. It’s a really risky game, requires a lot of patience. But he trusts his calculations, stays perpendicular to the upcoming waves and there he goes, riding the wave. Successful real estate investors have learnt to move like the surfer.

They have figured out that the best investment strategy as a real estate investor is to simply be on the lookout. That is, open your ears and eyes to the possibilities available to you. A lot of real estate investors built their real estate empires by being informed and proactive when they spotted opportunities. How do you adopt this same strategy and generate wealth by spotting hot real estate markets?

Yea, it’s true. Too much information may be disadvantageous in some cases. All you need may be a stroke of intuition. Alas some real estate investors fall into the trap of making ‘educated guesses’ and filling their heads with too much details. Eventually, what could appear to be a ‘hot property’ ends out being a deal turned sour. Looks may be deceiving. But you need to look at the obvious signs and trust your instinct at the same time to ride the big wave of global property investing.

IDENTIFYING AREAS OF GROWTH

1. Gentrification.

These areas may have had poor reputation in the past, but now they are seeing homeowners moving in and changing the suburban landscape. Are there a number of renovation and improvement projects going on? Are new homes being built? Which means developers are turning their focus to that area. Are new cafes or retailers opening up? Most importantly, compare house pricing for a period of 2-3 years, if prices have grown steadily, look at the demographics. An increasing number of young residents with decent incomes is a strong indication that a suburb is about to gentrify.

2. Look for the ripple effect.

If you cannot afford to buy in a hot real estate market (you may have missed the mark this time), you may still be able to shop in the area by checking the surrounding suburbs. This takes time, so you need to know what phase, the local real estate market cycle is in. This will help maximize your chances of riding the wave of growth. How to analyze real estate market cycles.

3. Examine supply and demand

The relationship between supply and demand for property in an area is a key factor in price growth. If there is no more capacity to build in the suburb, but demand continues to grow, prices are likely to rise.

TIPS FOR FINDING HIGH DEMAND AND LOW SUPPLY AREAS.

·        Look for areas where rental performance is increasing. This indicates that an area is popular with tenants. When tenants become owners, they also tend to buy in the same area they are renting;

·        Look at the demographics of people moving in the area. For instance, suburbs where median age is around 35 or so tend to gentrify faster as these demographics tend to have better incomes and can thus afford to buy or rent more expensive properties;

·        Look for areas with increasing population. The population itself is not enough to boost prices, but when combined with other indicators such as increased incomes and low supply, this is a good indication that real estate prices will grow in the area.

·        Look for large ongoing infrastructure projects. This is a good indicator that the area is likely to see an increase in demand for housing as workers gather in search of employment. Projects that have already begun are preferable, as project pledges can fall through with changes in government and as budget priorities change.

Yes, you can be the one sitting on the next hot property. All it takes is a little knowledge, research and intuition.

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Housing Market Forecast 2024 & 2025: Predictions for Next 5 Years

  • 09, January 2023

As we move into 2024 and 2025, the housing market is likely to see some significant changes. After a tumultuous couple of years, there is some optimism about the future of the housing market. However, there are also concerns about rising interest rates, inflation, and a potential housing bubble. In this article, we will take a closer look at the Housing Market Forecast 2024 & 2025 and make some predictions about what we can expect over the next five years.

Introduction

The housing market has been on a wild ride over the past few years. In 2020, the COVID-19 pandemic led to a sudden and severe downturn in the market. However, the housing market has rebounded strongly in 2021, with record-high prices and a surge in demand for homes. With the economy showing signs of recovery and interest rates at historic lows, many experts believe that the housing market will continue to grow in the coming years.

Housing Market Forecast 2024 & 2025: Predictions for Next 5 Years

Increased demand for affordable housing

One of the biggest trends in the housing market over the next five years is likely to be an increased demand for affordable housing. With home prices at all-time highs and many people struggling to afford homes, there is a growing need for more affordable options. This could lead to an increase in the construction of smaller, more affordable homes, as well as a rise in the popularity of alternative housing options like tiny homes and mobile homes.

Continued growth in suburban areas

Another trend that is likely to continue over the next five years is the growth of suburban areas. Many people are looking to move out of crowded cities and into quieter, more spacious areas. This has led to a surge in demand for homes in suburban areas, and this trend is likely to continue in the coming years.

Rising interest rates

One concern for the housing market over the next five years is rising interest rates. While interest rates are currently at historic lows, they are expected to rise in the coming years as the economy recovers. This could lead to a slowdown in the housing market and make it more difficult for some people to afford homes.

Potential housing bubble

Another concern for the housing market is the possibility of a housing bubble. With home prices at record highs and demand outstripping supply, some experts are worried that the market may be overinflated. If this is the case, a correction could be on the horizon, which could lead to a significant downturn in the housing market.

Increased focus on sustainability

As concerns about climate change grow, there is likely to be an increased focus on sustainability in the housing market. This could lead to an increase in the construction of eco-friendly homes and the retrofitting of existing homes to make them more sustainable. Additionally, there may be an increase in the popularity of alternative housing options like tiny homes and shipping container homes, which are often designed with sustainability in mind.

Growing popularity of smart homes

Smart home technology has been growing in popularity in recent years, and this trend is likely to continue over the next five years. With the rise of the Internet of Things (IoT) and the increasing availability of smart home devices, more and more people are expected to embrace this technology in their homes.

 

FAQs

What will happen to home prices over the next five years?

It's difficult to predict exactly what will happen to home prices over the next five years. However, many experts believe that prices will continue to rise, although at a slower pace than we have seen in recent years. Rising interest rates and concerns about a housing bubble could lead to a slowdown in the market

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Global Real Estate Market Report 2023: Comprehensive Analysis and Forecasts

  • 30, January 2023

The global real estate market is a dynamic and ever-evolving industry that plays a crucial role in the global economy. As we look ahead to 2023, it is essential to gain a comprehensive understanding of the current state of the real estate market and make informed projections for the future. This article delves into the intricacies of the global real estate market, providing a detailed analysis and forecasts for the year 2023.

Introduction

The global real estate market has always been a significant contributor to economic growth and development. In recent years, it has witnessed remarkable transformations driven by various factors such as economic trends, demographic shifts, technological advancements, and environmental concerns. The year 2023 presents an exciting landscape for the real estate market, characterized by new opportunities, challenges, and trends that shape the industry.

Factors Influencing the Global Real Estate Market

The global real estate market is influenced by several key factors that impact its performance and growth potential. These factors include:

Economic Conditions

Economic conditions, such as GDP growth rates, interest rates, inflation, and employment levels, significantly impact the real estate market. A robust economy fosters demand for both residential and commercial properties, attracting investors and driving market expansion.

Economic Conditions

Demographic Trends

Demographic factors, such as population growth, urbanization, and changing household structures, have a profound impact on the real estate market. Understanding the preferences and needs of different demographic groups helps shape investment strategies and market offerings.

Technological Advancements

Technological advancements have revolutionized the real estate industry, leading to improved construction techniques, smart homes, virtual property tours, and digital marketing platforms. Embracing technology is crucial for real estate companies to stay competitive and meet evolving consumer expectations.

Environmental Considerations

Increasing environmental awareness has influenced the real estate market, with sustainability and energy efficiency becoming key priorities. Green buildings, eco-friendly practices, and renewable energy integration are gaining prominence, providing opportunities for innovation and investment.

Government Policies and Regulations

Government policies and regulations play a vital role in shaping the real estate market. Policies related to taxation, land use, zoning, and urban planning influence property prices, market liquidity, and investment attractiveness.

Regional Analysis

The global real estate market exhibits significant regional variations in terms of market dynamics, trends, and investment opportunities. Let's explore the key regions and their characteristics:

North America

North America boasts a mature real estate market, with the United States and Canada leading the way. The region offers stable economic conditions, diverse investment opportunities, and a well-developed infrastructure. The residential sector remains strong, driven by population growth and urbanization trends.

North America Real Estate

Europe

Europe's real estate market is characterized by its diversity, with variations in economic conditions, regulations, and cultural factors across countries. Urban centers like London, Paris, and Berlin offer prime investment opportunities, while emerging markets in Eastern Europe show great growth potential.

Asia-Pacific

The Asia-Pacific region is witnessing rapid urbanization and economic growth, driving demand for real estate. China, India, and Japan are the key players in this market, offering vast investment potential in both residential and commercial sectors.

Asia-Pacific Real Estate

Latin America

Latin America presents a mixed real estate landscape, with countries like Brazil, Mexico, and Argentina showcasing diverse opportunities. Emerging middle-class populations, urbanization trends, and favorable government policies contribute to the growth of the real estate market in the region.

Middle East and Africa

The Middle East and Africa region exhibit varying real estate markets, with countries like the United Arab Emirates, Saudi Arabia, and South Africa standing out. Rapid urban development, infrastructure projects, and increasing foreign investments shape the market dynamics in these countries.

Market Segmentation

The global real estate market can be broadly segmented into several categories based on property types and usage. Let's explore these segments:

Residential Real Estate

Residential real estate encompasses properties intended for personal use, including houses, apartments, condominiums, and townhouses. Factors such as population growth, urbanization, and lifestyle preferences influence the demand for residential properties.

Residential Real Estate

Commercial Real Estate

Commercial real estate refers to properties used for business purposes, such as office buildings, retail spaces, and industrial parks. Economic conditions, business expansion, and consumer trends impact the demand and profitability of commercial properties.

Industrial Real Estate

Industrial real estate includes properties used for manufacturing, warehousing, and distribution purposes. The rise of e-commerce and global supply chains has increased the demand for industrial spaces, particularly in logistics hubs and key transportation corridors.

Hospitality and Tourism Real Estate

Hospitality and tourism real estate comprises properties such as hotels, resorts, vacation rentals, and hospitality infrastructure. Global travel trends, tourist arrivals, and destination popularity influence the growth and profitability of this sector.

Emerging Trends and Technologies

The global real estate market is experiencing several emerging trends and technologies that are reshaping the industry. These include:

PropTech

PropTech, or property technology, refers to the use of technology and innovation to enhance efficiency, transparency, and convenience in the real estate sector. PropTech solutions include virtual reality tours, blockchain-based property transactions, and smart home automation systems.

PropTech

Co-living and Co-working Spaces

The rising popularity of co-living and co-working spaces is transforming the way people live and work. These shared spaces provide flexibility, cost-effectiveness, and community-oriented environments that cater to the evolving needs of modern professionals.

Sustainable and Green Buildings

Sustainability has become a significant focus in the real estate industry. Green buildings, energy-efficient designs, and eco-friendly practices not only reduce environmental impact but also provide long-term cost savings and enhance property values.

Investment Opportunities

The global real estate market offers a multitude of investment opportunities for individuals and institutions seeking to diversify their portfolios. Some key investment avenues include:

Residential Properties in Emerging Markets

Investing in residential properties in emerging markets can yield substantial returns due to factors such as population growth, urbanization, and increasing middle-class populations. Careful market analysis and understanding local regulations

 


 

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