3 Types of real estate properties and their differences
Real estate investment comes in several varieties, and having a thorough understanding of the various kinds is vital so you can choose the right one for you.
There are three basic types of properties in the real estate industry: commercial, residential, and vacant land. Commercial property refers to office space, retail stores, industrial units, warehouses, etc. Residential property includes houses and apartments used for living purposes, whereas vacant land is undeveloped land yet to develop.
Further, it consists of three different types: under construction, ready to move in, and resale properties and let’s understand the difference between them.
Under construction properties vs. ready-to-move-in properties vs. resale properties: What’s the difference between them?
Whether you are buying a commercial or residential property, you must think about how the property will benefit you in the future. Thus, comparing whether you should purchase under construction, a ready-to-move-in property, or a resale property is a wise decision that can assist you in making a quick and informed choice.
The three common real estate property types are under-construction, ready to move in, and resale properties. Each type has its pros and cons. Let’s take a look at each one!
1) Under construction properties: These properties have been built but not yet sold or rented out. They can either buy new homes that haven’t started selling yet or older houses that need some work done before they become available for sale.
2) Ready to move in properties: This means that these properties will soon be available for rent or purchase. The seller may want to sell it as fast as possible because they want to quickly get rid of this house. Or maybe there was an unexpected financial problem with the buyer, so the seller needs to find another home immediately.
3) Resale properties: A resale property is already owned by someone else when you buy it. It might be a newly constructed home or an old house that just needed minor repairs. You could also buy a preowned condo building to invest in rental income instead of purchasing single-family homes.
Let’s break down each difference one by one!
Our first concern about property prices is how to purchase properties at less expensive rates. When it comes to property prices under construction, the price is lower than the market price, while on ready-to-move-in buildings, the price is more than the market price. On the other hand, the resale price can be either the market price or lower if the seller is in need.
Delivery of possession
Possession is one of the things that no one wants to delay. With under construction, there can be a possibility of delay, but with ready to move in and resale, you do not have to wait for possession as you can move in at any time.
Checking the quality of construction
Good construction quality will let you know how long the structure will last. In the case of under-construction, you can inspect the quality at possession time. While, when you are ready to move in or resell, you can verify at the time of purchase.
Your returns on investment also determine your future benefits when investing in real estate. So make wise investments, and don’t invest in a rash manner! When comparing returns, under-construction properties enjoy high returns, whereas ready-to-move-in properties recover moderate returns. While in resale properties it is apparent the return is low.
In terms of loan facilities, under construction properties depend on legal clearances and papers, while ready-to-move-in and resale properties are available.
As far as risk factors are concerned, under-construction carries a high level of risk. However, compared with resale properties, ready-to-move-in properties are less expensive.
As an investor, a property under construction is an excellent investment opportunity. At the same time, both end-users and investors can purchase resale properties, ready-to-move-in properties catering to end-users.
Therefore, here are some significant differences to consider before choosing a suitable real estate investment. Moreover, the value of newly constructed properties rises more rapidly, while ready-to-move-in properties can earn 1.5% to 2% a year (of their value).
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.