How to pay for property? The best two ways to pay the down payment on a future property
Today, How to pay for property is to have enough savings to pay for part of it. And then get a mortgage for the rest.
Many people do this by putting their foot money into safe but not very profitable investments. Like time deposits and conservative mutual funds. But it is becoming more common to pay for the foot of a property in installments. With delivery in the future. This is done to avoid getting too much debt.
In the best cases, and if the investor is good at saving money, this option includes buying a white or green property to save money while the building is being built and then paying off the installments on the date or a few months before the property is delivered.
So, the foot payment is kept separate from the mortgage loan dividend. Buying properties with a white or green promise to sell is a good way to invest because it makes a lot of money. These ways of buying are easier than making monthly deposits into a term deposit, a mutual fund, or a savings account, since it is an investment in UF and is subject to capital gains from construction.
1. Why should you buy a “green” house?
When you buy green, you promise to buy a home that is still being built. So, it’s not done yet, and the relevant municipality hasn’t given its final approval. Since not everyone has enough savings to pay the down payment right away, one of the best things about buying green is that the down payment can be paid in different ways. Since it’s a property that won’t be ready for a while, the real estate market gives you a special time to save this money and pay it off over time.
So, the investor pays the foot over the time it takes to finish the project, which is usually between 12 and 30 months.
Buying green has advantages such as:
- It’s a good idea to buy cheaply in a good area. Buying green is finally a good deal for real estate investors who want to buy cheaper in a more expensive neighborhood and then lease or sell at a higher price.
- The future owner has more freedom to choose the apartment he wants to buy, such as the location, connectivity, and condition of the neighborhood.
- Another good thing to think about is that the pilots of green buildings are usually still around when the projects are done. This means that if you know how the building is put together, you can negotiate to make changes or improvements.
But there are two problems with this option if the foot is turned around:
- It was time. The property can’t be given away right away. When you buy in green, you have to wait anywhere from a few months to a few years, but from an economic point of view, it’s usually much more convenient than buying something with immediate delivery.
It’s important to know that the date that the real estate agencies agree to deliver the apartment can change by days, weeks, or even months. Everything will depend on the conditions of the work, how well it is done, or even problems with money.
- A buy on faith. Since it’s an advance purchase, you can’t see what you’re paying for because there are no drivers yet when you sign.
Even though it doesn’t happen often, there may be differences between what is sold and what is on the property, such as warehouses, barbecue areas, swimming pools, or parking lots that aren’t included in the sale.
To avoid trouble, it’s best to keep the plans and specs that were given to you when you bought something. If there are problems with how the property is delivered. It is best to talk to the real estate agents directly (or through a representative) before going to other places.
2. What does it mean to buy blank properties?
When you buy a “blank property,” the project already has the right building permit or land use change. But the digging hasn’t started yet. In other words, you don’t just buy a house or apartment before it’s finished being built. Instead, you sign the papers before the project even starts.
The real estate company says that the new project will be ready around a certain time. The only thing the investor knows about how the building will be made is what’s on paper. It will take at least two years to hand over the property. But the value of the white mode is much lower than the value of the green mode or immediate delivery.
The best reasons to buy blank are:
- Economic. The price of the purchase goes down and makes it easier to pay on foot. If the person who wants the property doesn’t have enough money to pay for it all at once, the money is split into payments until the property is given to them.
- Flexibility. When a client buys a blank, they can choose where they want certain parts of the property to be, such as the distribution, parking, and warehouse.
When buying under this method. It’s important to remember that since it’s an even earlier purchase than the green method. Both the financial benefits and costs of buying blindly are even stronger. Choose a reputable real estate company that gives you the best price. So you don’t get any big surprises.
What happens if I don’t have enough money saved for the first step?
The best way to buy a house is to pay for it in installments, either in green or white money. But not everyone has enough savings to pay their rent right away. Or they aren’t yet qualified to bank, so they need to think of other ways to save money and earn interest over time.
Investing in mutual funds is a good way to do this instead of putting money down on a house. It includes a way to invest that is a little riskier. It’s a type of investment where the money isn’t guaranteed to make money. Because there’s a chance that the investments won’t make as much money as expected. Mutual funds are made up of all the money that people and businesses give to a company or manager that is regulated by the Commission for the Financial Market (CMF).
By giving this money to the management company, it invests it in different types of publicly traded securities or goods in order to make a profit that will be shared with everyone who contributed. Each person who puts money into the mutual fund must understand that giving the money to an administrator is a risk that they must take on.
But what’s interesting about this type of housing investment is that you can ask for information. About how profitable the chosen mutual fund was in the past. So you can compare it to the profits made by other funds of the same type and during the same time periods, or to the profits made by other savings and investment options.
This will help you make a better choice and avoid risks in the future. If the risk is too high for the investor, they can ask to get their money back. Taking into account how profitable all or part of their investment has been. They will get their money back within 10 days, which is the longest time allowed by the fund’s rules.
The best choice is always the promise of sale for white or green properties. Because you can pay in installments without interest. The foot should only be paid for in cash if paying it off in installments would mean paying a lot of interest.
Cash and installments are both good ways to invest. Because they could give you a good return. They are also more convenient than putting money in a time deposit, mutual fund, or savings account every month.
But the funds are a good way to invest, even though the return is low but easy to get.