Developers often lure investors to purchase the units they are building with good marketing, the joy of a brand-new property, no transfer duties and no transfer costs, and some hopeful claims of rental income and good yields. The developers often need to reach certain sales targets to access bank financing to complete their project and will sometimes offer very enticing deals to reach these targets. But is it worth it from an investor’s perspective?
On the positive side, a new development will have modern finishes, and in the better developments a whole suite of mod cons may be included, as well as communal amenities and benefits that may be attractive to some tenants. There is a strong hope that maintenance costs for the first couple of years will be minimal.
On the negative side a few important facets stand out:
On the whole, investors are recommended to not be fooled by sales talk and nice-to-have features that future tenants are unwilling to pay for and are encouraged to do their own homework with regards to expected yields. Very often a second-hand apartment in a more established complex will offer better returns and lower risks.
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