Real estate developments are business processes that include activities such as the re-leasing and renovation of existing infrastructure, the sale of developed property, and the purchase of land. Development properties are properties that are currently being developed and have not achieved at least an 80% occupancy rate.
As demand for housing continues to grow in Kenya, it’s no surprise more and more people are considering going the real estate development route, and investing in something that’ll increase their wealth and ensure their future.
With that said, let’s take a look at some of the pros and cons of such investments.
THE PROS:
Modernization
New real estate developments provide for the latest enhancements, upgrades, and technology. These include things like updated security systems, fibre optics for high-speed internet, insulation, and soundproofing. All these things can be added to the property.
Financial Savings
When you purchase a real estate development, you’ll get the chance to save on many different expenses. For instance, the developer usually handles the transaction expenses and you can even be exempt from paying transfer duty costs. Another financial benefit is that the selling price will include VAT.
Increased Personalization Options
Instead of purchasing and living in a home that was meant for somebody else several years ago, you will be able to occupy a space that meets all your needs, preferences, and requirements. You will have the chance to decide the finishes you want as well as determine the size that’ll best suit you.
Better Security
Real estate developments are usually accompanied by intense security protocols. Some of the main characteristics of such developments include security guards and controlled access. You can rest easy knowing that both you and your family are safe.
Upkeep
The other property developments that surround you are most likely going to well-maintained and new. This will, in turn, have a positive impact on your property’s value. Additionally, developments will often have rules and regulations regarding conduct, gardens, and building work that all who live there must follow.
Early Bird Deals
Developers normally offer fantastic deals at the initial stages of the project. Getting in early means potentially getting a super deal.
THE CONS:
Levy Increases
If there are many unsold development units, you might have to deal with a special levy or you may have to pay higher levies.
Plans May Differ from the Finished Product
When buying an off-plan property, the developers are most likely going to show you an artist’s or graphic designer’s impression of how the house will look like. Once the building is complete, it might not look like anything you thought it would or expected. Additionally, some greedy developers may add apartment buildings in the middle of individual houses simply because they want to sell more houses.
Lot Size
New houses are often built on much smaller lots compared to the older houses. If you want that huge backyard, with a lot of space between you and your neighbours, unfortunately, you might not find what you’re looking for in a new development property.
Different Finishes
The fixtures and fittings you find when you look at the show house might not be the ones you get once you buy the house. Ensure that the purchase agreement specifies the kind of fixtures and fittings you can expect and be careful of any contract clauses that’ll the developer to leave you with cheaper substitutes.
Lack Of Control
When you decide to buy a house in a real estate development, you should be ready to abide by the developer’s will. They act as the judge, jury, and executioner as far as how the house looks and the pricing. In other words, you will have to go with whatever they decide to do.
Legal Battles
There have been numerous cases of ending up in a lawsuit. Whether the developer failed to disclose defects in the property or acted in negligence, there’s a good chance you will find yourself battling developers in court. Therefore, it’s necessary to always involve a lawyer who will review the contract and do a search of the property.
Environmental Degradation
Development projects can harm the environment especially if the developers prioritize profits over environmental conservation. Some of these estates don’t have any greenery and worse, during construction, any existing greenery will be taken down to make room for houses. Additionally, some developers may acquire land that used to be a recreational area to put up houses.
False Promises
Last but not least, you should be aware of false promises especially if you buy the development early. The developers will sell you plans that sound like a dream only to deliver something completely different. As they say, if the deal sounds too good, think twice.
Hopefully, now you know the good and bad of property developments and can make an informed risk.
For more tips, here’s a helpful thread by @lungile_mashele
Check out The Pros And Cons Of Buying Off Plan Properties
