Pre-selling luxury apartments and luxury condos has become increasingly important for successful real-estate developers these days, and is often an essential requirement in successfully completing any luxury residential development.
The requirements can vary from site to site, but developers normally need to pre-sell a certain number of units before construction begins to guarantee further loans to help complete later phases of construction.
Pre-selling properties such as luxury apartments and luxury condos are important to real-estate developers for several different reasons.
Firstly, they help overcome any financial constraints due to high construction costs, meaning that any money from pre-selling can be used to support production or help reduce costs using debt financing by increasing equity capital.
Moreover, as real-estate developers have to start the construction of properties without actually knowing what the future demand or the local market will be like after completion, there is the risk that if demand unexpectedly dropped off, a developer would struggle to repay loans, which could even lead to bankruptcy, in the worst case scenario.
By securing the selling-prices at an early stage by pre-selling luxury real estate, this risk is vastly reduced. Pre-sales are now so important in successfully applying for loans that investors often set a requirement for the developer to secure a set number of buyers for their luxury apartments before giving their approval.
The Buyer’s Perspective – Buying Luxury Condos
From a buyer’s perspective, pre- buying luxury condos or luxury apartments is considered risky-business, but is also one that offers significant advantages.
Often there is a great chance that a luxury apartment will be worth significantly more once built, meaning that if risks can be minimized, obtaining a property for a much lower price via a pre-sales scheme can be very lucrative.
There are also laws and regulations that help to minimize any risks. In the case of luxury condos in Vancouver, there are benefits such as only having to leave a 5-10% deposit fee, not having to take out a loan straight away, warranty protection, and in the case of a property never being completed; a full refund to the buyer is guaranteed. In such environments, buying a pre-sale property could be well worth the investment.
Another big advantage of pre-sales is that buyers can get the opportunity to have direct input into how their own brand-new luxury apartment will be customized, often down to the very last detail.
However, there are also significant risks. Firstly, although there is a good chance that your off-plan property’s value will increase, this isn’t guaranteed, so there is always the risk that your property could actually lose value if the market is volatile. Unforeseen delays may also also arise during the construction stage delaying the completion of your luxury apartment.
The biggest risk of all to the buyer is ending with something that’s very different to what was expected and paid for. With this in mind, it can be much harder to convince a client to invest in a property without trust earned from a comprehensive and well communicated design process. Luckily there are ways to aid all parties in this.
3D Visualization For Pre-Seliing Luxury Condos
Thanks to 3D visualization technology, many of the obstacles associated with pre selling luxury property can be avoided.
With architectural renders the buyer can see exactly how the luxury apartment will look and get a sense and feel of the space. Photorealistic renderings can also be used to accompany one of the largest benefits of buying a pre-sales apartment, customization.
As changes can easily be made, a client can essentially design their own apartment to their own liking, making 3D renderings a new cutting-edge tool when it comes to persuading your clients and keeping them happy.
3d visualisation technology can also help overcome another large obstacle of selling an unbuilt-property; selling the concept of a home rather than a house.
The emotional connection created through a rendering or a VR tour can be extremely powerful as buyers are able to visualize their own lives in a space and see the luxury apartment as a home rather than just a house, which is the key to selling luxury real estate.
The fact that the client knows exactly what a property will look like before construction means that many of the doubts associated with not knowing what the product will look like can be significantly quelled.
Conclusion
A mediocre 3D rendering might serve some purposes, but to be enough to grab buyers attention and create the emotional connection needed to close a sale, they increasingly need to be of photorealistic quality. As an image is “worth a thousand words”, getting these images to be perfect, will have a huge impact on your pre-sales. Any less than than amazing may harm your chances.
Pricing for these types of images may seem a touch steep, but the introduction of good quality 3d rendering has had a big impact on the construction industry, meaning that top quality renderings can set you apart. And in the luxury real estate market, cutting corners by attempting to save in the short term, will likely hand the advantage to your competitors who take investing in quality marketing materials seriously. Read about the cost of rendering by clicking the link.
In the end, the costs of these images are likely an infinitesimally small fraction of the overall value of the luxury property, and yet will make the difference between selling and not selling a property to a prospective buyer.
This is resulting in successful real estate developers of tomorrow and those of yesteryear, who are being left behind as they fail to adopt the new standard by working with a rendering company.
