Pre-sale and pre-rent

Pre-sale in Real Estate (Rwanda Context)

1. Meaning of Pre-Sale

Pre-sale means selling real estate units (apartments, houses, or plots) before construction is completed — sometimes even before construction begins.
Buyers pay in installments during the construction period, and receive ownership (title deed or handover) once the project is finished.

It’s a common model in markets where developers need upfront cashflow to fund construction and buyers want early access to affordable properties.

How the Pre-Sale System Works

Step-by-Step Process

Step	Developer Action	Buyer Action
1. Project Launch	Developer designs project, obtains permits, and markets it before construction begins.	Buyer views plans, models, and location.
2. Pre-Sale Agreement	Developer signs a sales agreement specifying payment schedule, delivery date, and terms.	Buyer pays a deposit (often 10–30% of the total price).
3. Construction Phase	Developer uses buyers’ installment payments to fund construction.	Buyer continues to pay agreed installments (monthly or quarterly).
4. Completion & Handover	After construction, developer delivers finished unit.	Buyer pays final balance and receives ownership documents.

Advantages

For Developers

✅ Early cashflow to fund construction
✅ Reduced need for expensive bank loans
✅ Guaranteed sales before completion (lower risk of unsold inventory)
✅ Market credibility when project sells fast

For Buyers

✅ Lower purchase price (early-bird discounts)
✅ Flexible payment schedule (installments during construction)
✅ Choice of unit before project completion (location, layout, view)
✅ Opportunity for capital gain — unit value usually rises by completion

Pre-Rent in the Rwandan Real Estate Market

1. What “Pre-Rent” Means

Pre-rent (or advance rent) refers to the practice of renting out property units before the construction or renovation is completed.
It is similar to pre-sale, but instead of buying ownership, the tenant reserves the right to rent a unit in advance — often by paying a deposit or signing a lease before completion.

In simpler terms:

Pre-rent = “booking your future rental house or apartment before it’s ready.”

This model is becoming a modern real estate trend in developing urban markets like Kigali, as developers and landlords try to secure early tenants and steady cash flow before the project is finished.

How the Pre-Rent Model Works

Typical Process

Step	Description
1. Announcement / Marketing	Developer advertises units (apartments, houses, offices) before completion.
2. Reservation	Tenant shows interest and signs a “Pre-Rent Agreement” or “Letter of Intent to Lease.”
3. Deposit Payment	Tenant pays a reservation or advance deposit to secure the unit.
4. Completion & Inspection	Once construction or renovation is done, tenant inspects the property.
5. Lease Activation	Tenant moves in and starts paying regular rent as per the lease agreement.