Buying Property Off-The-Plan
8th March 2012
Buying off the plan simply means purchasing a property or entering into a purchase agreement at the planning or concept stage, as opposed to a finished dwelling or building. Your decision and the value proposition will be outlined in detailed architectural drawings and supporting information, such as finishes, facilities offered etc. Typically these drawings are presented in the form of a sales brochure from the developer. Usually planning consent has been approved and the development may already be under construction, however it will not have been completed.
There are various types of essential properties that you can purchase, these categories include, new apartments, land and estate sales, house and land packages, new home design and even commercial property. In the likes of the UK some people may refer to this as buying Off Plan. This is more preferable to some because off plan property investment is believed to be so convenient; it’s investing on a property prior to the finishing of the construction.
Here are the benefits of buying property off the plan:
- Off the plan property can be purchased as a means to long term investment or you may consider re-selling it prior to the accomplishment of the construction. Upon the completion of the project, if the investor considers keeping the property, they can choose to pay a balance with a loan agreement or use his own funds and rent or charge a fee for its use.
- You may be able to purchase a home for you to stay and lock in the purchase price while the building process is ongoing. In other words, even if the value of the said property increases during the construction period, you will still end up paying for the same agreed property cost.
- The settlement procedure in buying property off the plan usually requires a long period of time. Therefore, you can have plenty of time to save for the deposit and enough time to arrange or systematize your finances. This is often referred to as ‘lead in time’
- Sometime you may be able to request some things that you would like to be added or designed while your house is under construction.
- Buying property off the plan allows you to obtain considerable amount of tax savings.
- Since the property is brand-new, you don’t have to spend much on maintenance.
- Off plan property is hassle-free, very easy to purchase.
- When the construction process is completed, the newly-built property is easier to care for, be in charge of, to rent or lease out and sell.
- You have the freedom to select the best units, how you want it to be finished and the property’s view or ambience.
- In some instances as a purchaser of the off plan property, you can have returns and guarantees provided by the property’s developer.
- There are available payment schemes that offer instalment payments.
- A wide and plenty of selection of property is always available.
- If you will negotiate or deal earlier with the developer, you will be provided with the opportunity to pick the best design and the best place that will be offered at a price you will surely grab.
- Portfolio diversification.
- You can resell before, during or after construction
- Low maintenance costs and a builder’s construction warranty, provides peace of mind and ongoing savings in the early years of ownership.
- Greater depreciating benefits as an investment.
In any market buying off the plan can be considered a cost effective way of purchasing a property. For the developer, time is money, their goal is to ensure the product sells quickly and will therefore price the properties accordingly usually at or below current market values. The incentive for the developer to obtain their finance and complete their development, the sooner completion occurs the sooner their profits are realised, and they may begin the next project, this is one of the main reasons property investors buy off plan.