While scouting for a project, I happen to meet an old friend of mine, who is also in the property business. He suggested me a project and said, “I will get a first mover advantage in the project.” Till date, I had heard the term first mover advantage was only applicable for developers. But from the buyer’s point of view, the first mover advantage in a project can have a specific meaning. A buyer who can buy at the initial stages of construction has also got the first mover advantage in terms of investment and returns.
If one invests at low ticket size, chances are that returns would be higher. Often it is observed that projects at its commencement offers properties at discounted rate. When a project is announced in a region, the rate offered by the development firm is based on the larger perception of investors in the region. This in fact benefits genuine home buyers, who are always on a lookout for an affordable option or a property at a discount.
To up the sales in a particular project, investors and the company then sell the first phase of properties at inaugural rates. A number of projects are often announced with inaugural prices.
Once the project starts, the inaugural rates then are revised to a market linked rate. If you are an early investor, it is important to gauge and measure the viability of a project and also site out a region which offers projects that are viable and promise healthy returns.