Investing in Pre Launch (Soft Launch) Real Estate Properties

Investing in Pre Launch (Soft Launch) Real Estate Properties

- Most real estate projects are developed in phases. Even before the basic approvals are in place, developers may start marketing projects to brokers, buyers and investors at a discounted price. This is called soft launch or pre launch phase of project.Early investors & buyers can avail discounts in pre launch phase.


- Developers may offer a 10-20 per cent discount on a limited bookings from early birds to attract buyers and generate cash flow. Discount offered is also a way to compensate for the risk shared by buyers investing in pre launch stage. 


- Investing at the soft-launch stage is more risky than at the advanced stage. The risks associated with such projects are reduced significantly in later stages as most of the legal approvals, sanctions, finance from banks, etc are in place. Financial institutions may decide not to finance a particular project due to insufficient paperwork, legal issues, disputes, etc. Construction can also be hampered later due to various other issues. 


- Builders raise prices after development begins based on the demand and the number of buyers. The increase is also determined by prices of competing projects in the vicinity.


- Investors can earn a quick profit by selling at premium price after the project's formal launch or in the later stages of the project.


- For pre-launch sale, the builder signs an agreement with the buyer to sell at a later date. The final terms and conditions of sale may not be clear at this stage.

- Buyers, investors with more risk apetite may prefer pre launch projects considering repute of the builder & various other factors including likely chances of getting quick appreciation. For those who do not prefer to take much risks may rather wait for projects to officially launch to see the legal paper work & get more clarity on the project.