If you think about buying an apartment, but you probably consider the issue of acquiring it through shared construction (read here). In connection with not the highest living standards of the population, this method of acquiring an apartment, in the past few years, is in great demand. First of all, this is due to significant savings.
Let us consider in more detail the entire process of shared construction and highlight for ourselves, its advantages and disadvantages. But first, we consider what it is. So, shared construction is a type of investment activity in which the developer attracts investment for the construction of real estate through the shares of individuals or legal entities.
After the project is completely commissioned, the developer is obliged to distribute the construction object between investors, according to and shared capital. In other words, every person who decided to acquire housing through shared construction becomes an investor with all the risks that arise from this.
Features of shared construction.
Despite the fact that shared construction is very convenient and profitable in comparison with the same mortgage where you not only pay, huge interest to the bank and purchase housing at market value, in recent years you can very often find loud trials with the developer about the failure to fulfill their own obligations. And there may be several reasons for this. Starting from ordinary fraud to the financial problems of the developer.
There are often situations that the budget for the construction of a house laid down at the very beginning is not enough, which leads to additional financial costs by investors.
There is also a risk. the fact that the object simply will not be handed over. This factor can be associated with various bureaucratic wires (for example: lack of permits), problems with communication systems, violation of construction technology, etc.
As you can see, shared construction has enough problems, and the risks are high, but very often such risks are justified, due to the lower cost of the apartment. I would like to note that such risks are quite simple to reduce, adhering to simple rules. How to do it, and what other pros and cons of the purchase of housing through shared construction, let’s look at below.
The pluses of shared construction
One of the most obvious advantages of buying housing by concluding a shared construction contract is a significant saving for buyers. In a percentage, such an apartment will be cheaper than the average market value by an average of 15-40%. That you will agree very much, especially if you purchase housing in a mortgage where you need to overpay huge interest to the bank for an intermediary. In addition, as an investor, you can take part in the construction of the house at the pile of the pit, which will significantly save your money.
The standard shared construction agreement is very convenient, due to the fact that after the conclusion of the contract, the shareholder makes the first part of the necessary amount. He makes everything else in parts in the construction process. This investment method is very convenient for potential investors for two reasons. Firstly, as an investor, you minimize the risk of losing your money, and secondly, this is a very convenient way to purchase housing in installments if you are currently not having the right amount.
The third advantage is that you purchase housing in the primary market. And this is in turn: free layout, new communications, modern construction technologies, and finally, it is prestigious. In addition, many developers provide their investors with the opportunity to choose the floor on their own, and in some cases to reserve their favorite apartment.
After the construction is completed, the community of the owners can independently choose a management company that will engage in maintenance and repair of the house and the surrounding territories on a tender basis. Thus, you, as an investor, can independently choose a company that will provide the maximum number of services for the minimum cost.
The disadvantages of shared construction
Of the minuses of shared construction, its term can be distinguished. As a rule, from the moment the foundation is poured to the full commissioning of the house in operation, 2 to 4 years passes. In some cases, the deadline for delivering a house into operation may be delayed for an indefinite period.
In addition, by purchasing an apartment through shared construction, you must be prepared for other difficulties. Problems can be completely different, ranging from bureaucratic delays, and ending with technical aspects and other force majeure circumstances.
One of their essential disadvantages of buying housing in this way is that you do not see, so to speak, «a product with a face». When purchasing an apartment in a new building, you do not see the house itself, and you cannot control the quality of the building and materials that are used in construction. That in the future it can be a very unpleasant surprise.
Perhaps the main drawback of the purchase of an apartment using shared construction is the dishonesty of developers. At one point you can lose all your money without receiving such long -awaited housing. It is this feature that is the main risk factor, due to which many potential investors refuse to purchase housing in this way.
Result
As we see from the purchase of housing through the conclusion of a shared construction agreement, there are pros and cons of. Despite the fact that there are much more advantages, many people refuse to buy an apartment with investment due to great risk not to get it. To minimize the risks of housing purchases using shared construction, let’s look at a few important tips:
When choosing a developer, carefully study the information about the company. When it is registered whether she has successfully rented apartments with the involvement of shared investors, whether there were judicial claims on the developer on non -fulfillment of his obligations;
When signing a shared participation agreement, you should contact independent lawyers for a more detailed study and identify all pitfalls in it;
If possible, conclude an agreement with large companies that are “by ear” and monitor their reputation in the market, for example: .