Benefits of buying an apartment in a building under construction

One way to do this is to choose an apartment under construction. Developers start selling apartments long before the house is put into operation. Along with this, they have every right to do so, because according to the legislation, the sale can be started immediately after obtaining a building permit.

Developers sell apartments in a building under construction for several reasons:

1. Coverage of part of the costs. In other words, buyers act as investors who literally have a whip-round so the contractor can build a new home for them. And many developers in the early stages of construction even sell apartments by instalments with a minimal down payment.
2. Guarantee that all or most of the apartments will be sold out. Starting the construction of a new house, any company would like to get at least some guarantees that the project will make a profit. And the best way to be sure of this is to start selling apartments.
3. Earning income here and now. Construction is a lengthy process, especially when it comes to a large residential complex with several houses and internal infrastructure. Few companies have such a budget that they can only invest money for several years, while construction is underway. That is why developers have to sell apartments almost as soon as construction begins.

Residential complex construction stages

Building a new home is a lengthy process. Even developers with many years of experience sometimes delay construction due to circumstances beyond their control. Therefore, even before deciding to buy an apartment at the construction stage, you should understand what phases the developer goes through before the house is ready for living:

• Search for the relevant site. As soon as the developer finds a suitable place, he buys the land from the city or leases it.
• Geological analysis of the territory, development of architectural and engineering projects, obtaining expert opinions, project approval in government bodies.
• Registration of an official building permit. Submission of documents to state supervision authorities.
• Preparation of a site for construction. To do this, they level it, demolish old buildings (if any), take out garbage, etc.
• Immediate construction of a residential building, connection of all necessary engineering networks.
• Putting the house into operation.

At any of these stages, for various reasons, difficulties may arise that will lead to delays in putting the house into operation. Therefore, it is not always possible to move into an apartment in a building under construction within the established time limit.

You can often find out that apartments are being sold at the excavation stage. This indicates that housing is being sold at the initial stages of construction. That is, the developer, relatively speaking, only dugs a foundation pit, but he is already actively selling apartments in the future building.

If we consider the issue of building a house from the point of view of pricing policy, then the whole process can be divided into the following stages:

• From the pit to the first three floors. To save more money, it is better to buy an apartment at this stage. A potential buyer can come to the object to see how the preparatory work is going and what the developer has already done. Serious companies are ready to show not only the documentation and provide the layout of future apartments, but also to conduct a full-fledged presentation using 3D modeling and digital technologies.
• The house is half built. At this stage, prices per square metre begin to rise, because it becomes clear that the developer plans to fulfill its obligations. The rise in prices in percentage correlation may even depend on whether the company meets the deadline.
• The new building is ready for putting into operation. At this stage, the building has already been built and connected to utility networks. The developer can finish minor works to be completed in the near future. This is the stage when the buyers will have to pay almost the full cost of housing.
• The house has been put into operation. This stage is not the most profitable for the buyer, because after putting the house into operation, you will certainly have to pay the full market value for one square metre. Often, at the last two stages, apartments are bought by people who are not particularly limited in money or who want to move into their new apartment as soon as possible.

Benefits of buying an apartment in a building under construction

According to statistics, more than half of the apartments in new buildings are bought out at the excavation stage or before half of the residential complex is built. It is quite obvious that this is due to the undoubted benefit for the buyer. After all, the earlier you buy a house, the cheaper it will cost. This is explained primarily by the risks that investors (buyers) take.

There are several reasons why many people are interested in an apartment in a building under construction. Benefits of buying residential property in the early stages of construction are the following:

1. Saving money. The cost of an apartment at the zero stage is always lower. As already noted, in the early stages, housing is always sold with big discounts, and with each stage of construction of a residential complex or a new house, prices per square metre will only rise. For this reason, if you need to purchase an apartment as profitable as possible, you should consider buying a home in a building under construction.
2. Possibility to choose an apartment of the required area and layout. The sooner you contact sales department, the more available options you have. If you become one of the first buyers, you can buy an apartment with a better location. The buyer can choose not only the floor, layout and number of square meters, but also where the windows will look out, in which entrance the apartment will be, and so on. In other words, for the first buyers the choice is always richer, which means that they will select an apartment that best suits their requirements and wishes. Besides, you can immediately purchase a parking space for yourself. And if you buy out several parking spaces, and rent them out to your neighbours or resell them at a bargain price after delivery of the building.
3. The possibility of getting an instalment plan from the developer on favourable terms. It is no secret that the developers are interested in selling apartments at the early stages of construction, and to attract investors, they not only reduce prices per square metre, but also provide buyers with instalments. This is an interest-free loan, issued for about 1-3 years (mostly instalments are registered before the completion of the construction of a building). This is a win-win deal. The buyer can purchase a home immediately without having the entire amount on hand. And the developer sells another apartment. Another advantage of buying a home by instalments is that you do not need to draw up any extra documents or, for instance, to provide a certificate of income. The home becomes the buyer’s property only after the full cost of the apartment has been paid.

Are there any risks in buying an apartment under construction?

It is worth realizing that buying an apartment under construction is always a certain risk. Low prices for living area are precisely due to the fact that buyers take risks. Despite the concluded agreement and all the developer's guarantees, at the excavation stage, your home can only be seen on paper. Physically, there are no apartments yet, so investors cannot be completely sure whether the new building is going to be put into operation on time and whether it is going to be completed at all.

In Ukraine, over the past 15 years, there have been several resonant cases when people paid money for apartments, and the developer never put the house into operation, leaving investors with no money and no housing. That is why, the experts recommend buying apartments under construction only from trusted, reputable and reliable developers, who have been engaged in building and selling apartments for more than one year.

If you want to buy residential real estate at the excavation stage at a low price, you can contact RIEL, Real Estate Corporation, founded back in 2003. During this time, it has established itself as a reliable partner in the Ukrainian real estate market. Over the years, the company has successfully completed more than 50 projects in Kyiv and Lviv.

The cost of housing under construction

The cost of housing in a building under construction directly depends on at what stage of construction to conclude a contract. Of course, the specific price for 1 sq.m of living space depends on many factors, including the financial policy of the developer. However, if we consider this issue from the point of view of economy, you will have to pay 100% of its cost after putting the building into operation.

If you buy a house when only half of the house is built, you can save about 20-30%. The most significant savings will be in the event that the developer has not yet managed to sell a significant part of the apartments or if it does not fit into the construction timeframe at all.

It is most profitable to buy an apartment at the excavation stage. In this event, the savings can be up to 50%. That is, if the total cost of an apartment is USD 50,000, then at the excavation stage you will have to pay only 25,000 for it. The benefits are obvious.

How to buy an apartment in a building under construction?

Buying an apartment in a building under construction is no different from purchasing a home in a new building that has already been put into operation. You need to choose the best house, the location of which is completely satisfying. After that, contact the sales department, ask for all the necessary papers, look at the layout and choose a suitable apartment. And then all that remains is to sign the documents and deposit the required amount.

Here are some tips to minimize the risks and buy an apartment on really beneficial terms:

1. Contact only trusted and reliable developers. After choosing a residential complex, find out about the developer: read reviews, look at the commissioned objects, check the company in the registers, etc.
2. Check all permissions, see the project.
3. Find out when the house is planned to be put into operation. For example, if a developer claims that three floors will be built in a month, but in fact, the foundation has not even been cast on the site yet, this should get you thinking about it.
4. Visit the construction site in person. It is recommended to come there from time to time during 2 or 3 weeks in order to track the progress of the construction. Serious companies generally do not tolerate lengthy downtime. And if only a few people work at the construction site in good weather on weekdays, this suggests the developer’s lightweight approach or that there is a lack of funds.
5. See what an apartment looks like in a building under construction. Thanks to modern technologies, you have such an opportunity now: usually developers prepare a full-fledged presentation, and the buyer can view his future home in 3D. This is the best way to estimate the apartment you will be living in.

It’s up to you at what stage of construction to buy your housing. You just have to answer a few simple questions:

• How much money am I going to spend and do I want to save?
• Am I ready to take risks?
• How urgently do I need an apartment and am I ready to wait for a few years to move in?
• Do I have the entire required amount or is it better to buy an apartment by instalments?

Having answered these questions, you can make a final decision about at what stage of construction of a new house it is better to buy your housing.