Investing in pre-construction is currently one of the most profitable real estate strategies — but it’s also an area where many first-time investors make costly mistakes that could easily be avoided with the right information and guidance.
Buying pre-construction is not the same as buying a move-in-ready property. While it offers clear advantages (lower prices, faster appreciation, flexible payment plans), it also comes with specific challenges that require attention and a long-term vision.
Below, we outline the most frequent mistakes first-time pre-construction investors make — and most importantly — how to avoid them.
Mistake #1: Choosing Based Only on Price, Not Location
Many investors fall into the trap of choosing a project simply because of its “attractive price,” without considering the actual location.
Buying cheap in an underdeveloped area or one with poor access can result in stagnant property value or low rental and resale appeal.
How to Avoid It:
- Verify the exact location of the project
- Research the area's growth potential
- Check infrastructure, access, available services, and safety
- Prioritize locations in consolidated or genuinely expanding zones
Mistake #2: Not Researching the Developer
This is the most serious and common mistake.
Not all developers deliver on their promises. Some never complete projects, deliver poor-quality work, or make changes without notice.
How to Avoid It:
- Research the developer’s track record: What other projects have they completed? Were they delivered on time?
- Read reviews from other buyers
- Verify they have current permits and licenses
- Ask about previous projects and visit them if possible
Mistake #3: Not Understanding the Contract or Delivery Terms
Many investors sign contracts without thoroughly reviewing:
- Delivery dates
- Payment conditions
- Finish specifications
- Penalties for delays (or lack thereof)
- Legal responsibilities
How to Avoid It:
- Hire a real estate attorney to review your contract
- Ensure everything included in the purchase is specified: equipment, parking, storage, common areas
- Ask about warranties or hidden defect guarantees
Mistake #4: Not Accounting for Hidden Costs
The pre-construction price is not the final price.
Many buyers fail to consider:
- Notary fees (5%–7% of the property's value)
- Trust (fideicomiso) fees for foreign buyers
- Additional equipment or furniture if the property is delivered as a "shell"
- Monthly maintenance fees
How to Avoid It:
- Create a total budget: purchase price + closing costs + equipment + maintenance
- Clarify from the start what is included and what is not Reserve an extra fund for unforeseen expenses
- Reserve an extra fund for unforeseen expenses
Mistake #5: Not Calculating Real ROI
Many investors buy solely for the appreciation potential but fail to calculate realistic returns (ROI) if they plan to rent.
Overestimating nightly rates or underestimating operational costs is a mistake that affects profitability.
How to Avoid It:
- Consult market studies for the area
- Use a conservative occupancy estimate (60%–70% annually)
- Include in your calculations: cleaning, maintenance, platform commissions, taxes
- Consult local rental managers or experts for real figures
Mistake #6: Believing Pre-Construction Is a Short-Term Investment
Pre-construction is a medium to long-term investment model.
Investors planning to resell immediately after delivery may face a saturated market or contractual restrictions on resale.
How to Avoid It:
- Approach your investment with a 3–5 year horizon
- Consider a hybrid model: rent for a period and sell when the market is higher
- Confirm if your purchase contract allows resale before deed registration (this is not always possible)
Mistake #7: Not Protecting Your Investment Legally
It’s essential to protect the money you pay during construction.
Some investors pay developers directly without verifying the existence of trust accounts or escrow mechanisms.
How to Avoid It:
- Prefer projects with a bank trust (fideicomiso) established from the presale phase
- Ask about escrow accounts or other payment protection mechanisms
- Never hand over money without proper documentation and a formal contract
Investing in pre-construction remains one of the best real estate strategies in Mexico — but it’s not a model for improvisation.
Profitability is in the details: choosing the right developer, understanding what you’re buying, planning for all costs, and having a clear view of your return timeline.
With the right information, professional guidance, and a serious analysis, pre-construction can become one of the smartest financial decisions of your life. Without them, it can turn into a frustrating and expensive experience.
