Weigh it up – you’ll be surprised.
Like a lot of things in life, there are pros and cons to certain kinds of property investing and buying off-the-plan is no different.
Buying a property off-the-plan means buying a house, townhouse or apartment in a complex that is yet to be built. Buying off-the-plan can be a great option but before you sign on the dotted line, here are some aspects to consider.
Con – You can’t see the property because it doesn’t exist…. YET!
Not being able to see, touch and walk through your new asset raises one very sticky issue.
You’re putting a lot of faith in the developers and builders to deliver the look and quality described in the glossy brochure.
If you decide to buy off-the-plan and the end result doesn’t live up to the expectation, you’re not going to be in a great position.
Make sure you only work with builders and developers who have a proven track record and an existing reputation of quality and over-delivering.
Look for companies with a strong, reliable, proven brand. Now is not the time to take a chance on the rookie crew.
Pro – You’ve Got The Luxury Of Time
One of the huge advantages of buying off-the-plan is you can pay a small deposit, lock in a property at an agreed value, and then sit back and do nothing while – if you’ve done a good job – your property rises in value before it’s even built.
To be able to do this, it’s vital you know the local market and choose an area that’s got high liveability factor, i.e. people are always going to want to live there.
If it works out the way you planned, your property will have equity by the time you settle.
Con – Your Circumstances Might Change
It can take years for apartments and units to be built, and if 2020 taught us anything it’s that anything can happen.
You need to make sure you’ll be able to get financing when the time comes to settle and you’re not in a position where you could lose the deposit and the property.
This is the element of personal risk involved with buying off-the-plan and highlights the importance of having some financial buffers in place should your situation change suddenly.
Pro – You can assess the property in detail, even if it’s not built.
While you may not be able to walk through the property, you will have access and time to analyse the floorplans.
There is a skill to doing this, and you should talk to an expert to get some help, but when looking at plans there are two main things to be thinking about.
- Will the space appeal to the local buyer’s needs. For example, is there a lack of three-bed properties in the area that are in high demand, or is it studios that everyone wants? Look at what the demographic needs and wants are, and make sure your property offers it.
- Is the floor plan functional? If it’s a three-bed apartment, does the square footage allow for king sized, or just single beds in some rooms?
Look at the amenities and storage space that’s been built in, as well as the design features and square meterage. Make sure the property lives up to what renters’ demand and expect from a quality property.
Is buying off-the-plan right for you?
Buying off-the-plan is just one of many strategies to becoming a property investor, and it might not be the one that’s right for you. On the other hand, it might be the approach that gets you out of the rat race fastest and with greatest wealth growth.
If you don’t know if buying off-the-plan is right for you, you can get educated and informed at one of our free property investing seminars. There you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you.
Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities.
Book here – Property Investment Seminar
Jason Whitton
Founder – Positive Real Estate