A Buyer’s Guide to Investing in Pre-construction Condos

Buying a condo before it’s built might sound risky, but for many investors, it’s one of the smartest moves they can make. Pre-construction condos, also called off-plan or under-construction condos, allow you to get in early, often at lower prices. Unlike buying a finished home, pre-construction purchases give you a front-row seat in the real estate development process. You’re investing in a blueprint, not a building, but with that comes opportunity. These condos are often located in key growth corridors, near new transport routes, shopping hubs, beaches, and business districts.

Pre-construction condos also tend to attract a wide range of buyers. Some are young professionals getting on the property ladder. Others are retirees looking to downsize or own a second home. Investors see them as a way to get solid returns without the high upfront costs associated with completed properties.

Benefits of Buying Pre-construction Condos

Let’s start with the obvious question: Why should you invest in something that doesn’t exist yet? You might be looking to improve your lifestyle or aiming for long-term capital growth; either way, this pre-construction condo investment strategy holds strong potential.

• Lower entry price. Developers offer early-bird prices to attract buyers. This means you often pay less than what the condo will be worth upon completion. That price difference can become instant equity once the project is finished.
• Payment flexibility. Instead of a lump sum, payments are spread out over months or years. This makes it more manageable for many buyers and gives you time to plan your finances.
• Appreciation potential. Property values can rise significantly between the time you buy and when the project is completed. If you invest wisely, you could make a strong return before ever moving in or listing it for rent or sale..
• Modern design and amenities. New condo construction usually includes the latest layouts, energy-saving features, and better materials. This appeals to renters and buyers alike, making it easier to find tenants or sell later.
• Customization. Some developers let early buyers pick finishes, layouts, or upgrades. You might be able to choose flooring, cabinetry, or appliance packages that suit your taste.
• Developer incentives. In competitive markets, developers offer perks, such as free furnishings, waived fees, or guaranteed rental returns, to early buyers.

These are just some of the benefits of buying pre-construction condos, making it a popular option for first-time buyers and seasoned investors alike. 

What to Know Before You Buy

Investing in pre-construction condos is not without risks. That’s why it’s important to consider a few key things before signing a contract.

• Location. If you’re looking at projects in Thailand, areas like Hua Hin are hot right now. There are many new condo projects Hua Hin has to offer that are close to the beach, golf courses, and lifestyle attractions. Buying in the right area increases your chance of future resale or rental profit. Pay attention to infrastructure plans like new transit stations or shopping centers, which can further boost value.
• Developer reputation. Look into their past projects. Were they delivered on time? Do the properties match the promised quality? Talk to previous buyers if you can, and research any news coverage or online reviews. A reputable developer is your best protection against delays or poor workmanship.
• Timeline. Most pre-construction condo purchase agreements come with estimated completion dates. Always prepare for some delays. Even the most reliable developers can be impacted by material shortages, weather, or permit issues.
• Ownership laws. Foreigners in Thailand can own condo units under certain conditions, but it’s crucial to get legal advice to ensure you’re eligible. Be aware of the 49% foreign quota limit in condo developments and understand your rights as a foreign owner.
• Newly built condos vs. resale. Resale condos are ready immediately but often come with fewer modern features. Pre-construction gives you something brand new, with less wear and tear and typically lower maintenance in the early years.
• Amenities. Don’t just look at the unit. Check for pools, gyms, parking, and security features. New condo Hua Hin properties often promote their upscale amenities as a selling point. These shared facilities can significantly improve resale value and attract quality tenants.

Costs and Process of Buying a Pre-construction Condo

One of the biggest concerns for any buyer is cost. So, how much does it cost to build a condo? The answer varies depending on location, size, materials, and developer. In Thailand, costs are generally lower than in Western countries, but premium projects in tourist-friendly zones or city centers can still command high prices.

Here’s a simple breakdown of the typical costs you can expect:

1. Booking/reservation fee. This secures your unit and is usually non-refundable. Think of it as your entry ticket into the development projects.
2. Down payment. Often 20-30% of the total price is paid over several months. This allows you to ease into the investment without upfront pressure.
3. Final payment. Paid upon project completion before transfer. This is usually the remaining 70-80%.
4. Legal fees and taxes. These can include transfer fees, maintenance deposits, sinking fund contributions, and government charges. Don’t forget to budget for ongoing monthly common area fees once you own the unit.

If you’re looking to buy pre-construction condo units as a foreigner, factor in currency exchange rates and bank transfer fees too. Exchange rate fluctuations can make a noticeable difference in your total cost.

Now, let’s walk through the typical buying process:

• Step 1: Choose a project and unit. Research thoroughly. Compare floor plans, prices, and project features.
• Step 2: Pay the booking fee. This temporarily takes the unit off the market.
• Step 3: Review and sign the sales and purchase agreement. Have a lawyer review the terms, especially the payment structure and clauses around delays or cancellations.
• Step 4: Make payments as scheduled. Stay on top of these to avoid penalties.
• Step 5: Wait for construction to complete. Some developers offer construction updates. Visit the site if possible.
• Step 6: Final inspection and payment. You’ll check the unit for defects before completing the final payment.
• Step 7: Transfer of ownership. Once the balance is paid and paperwork is done, the unit is yours.

This entire journey can take 1–3 years, depending on the project size. It’s long but can be worth it. Patience, planning, and working with trusted professionals are key.

Risks and How to Protect Yourself

Even the best-planned pre-construction condo investments come with risk. With a pre-construction condo purchase, some common issues include:

• Construction delays or cancellations. These can push back your move-in date or rental plans. In extreme cases, projects may be paused indefinitely due to permit issues, material shortages, or changes in local laws.
• Developer bankruptcy. If the developer runs out of money, you may lose your investment unless protections are in place. Smaller or newer developers may not have the financial stability to ride out economic downturns.
• Market shifts. Property values might drop, leaving you with a unit worth less than you paid. For instance, economic slowdowns, oversupply in the area, or interest rate hikes can affect demand and pricing.
• Design changes. The final property might not match the marketing materials. This includes unit layout, finish quality, or shared amenities. Sometimes changes are legally permitted within a certain range, so you may not have recourse.
• Hidden costs. Monthly maintenance fees, special assessments, or taxes might be higher than anticipated. These can affect your long-term returns.

To reduce these risks:

• Choose well-known, established developers. Look at past performance and customer feedback. A solid reputation is your best insurance.
• Use staged payment plans. These ensure your money is only released as construction milestones are reached.
• Read every clause in your contract carefully. Watch for clauses that allow developers too much freedom to change specifications or delay delivery.
• Have a lawyer review all documents before signing. Legal experts can spot red flags that you might miss.
• Ensure you have legal protection for refunds if the project is canceled. Look for refund policies, cancellation clauses, and force majeure terms.
• Understand your rights as a buyer. In some countries, government-backed protection schemes exist to safeguard your deposit.

Consider your exit strategy early. Will you live in the unit, rent it out, or sell it? Planning ahead will help you pivot if the market changes unexpectedly.

Remember, pre-built condos may offer faster returns, but pre-construction units let you shape your investment from the ground up. You have more flexibility and, often, more potential for value growth. And with more new condo construction projects popping up every year, this space is full of potential.

If you’re ready to explore under-construction condos that align with your lifestyle or financial goals, start researching today. We at Hua Hin Off Plan stand out as a specialized partner in the region. As part of Location Real Estate Co., Ltd., our portfolio features a range of options, from beachfront condos to ready-to-move-in apartments, designed to meet the needs of different types of investors.

Beyond property listings, we offer a curated selection of new development villas and condos, including off-plan, presale, and under-construction properties. We provide advisory services to guide you through the complexities of off-plan investments. Our team is here to ensure you’re well-informed about market trends, legal considerations, and the best investment opportunities in Hua Hin. Reach out to us today. You can call us at +66 (0) 86-916-1959 or email us at jon@huahinoffplan.com.