‘Off-plan property’ refers to property which is available for purchase before it has even been constructed. This is where the phrase ‘buying off-plan’ comes from;in most cases it is referring to the purchase of apartments,terraces etc.
Off-plan property is sometimes marketed to property speculators who purchase it with the aim of making capital gains by taking advantage of any discounts and selling into a rising market. In a rapidly-rising market, a buyer may even be able to sell the contract on, meaning they have the potential to earn a profit on the property before it is completed. Because people purchasing Off-plan properties tend to be looking to make a profit, they buy these properties in areas they see as promising. For instance investing in an off-plan property in an area that already has a lot of infrastructure in the immediate area, i.e, a new university or a mall, either already built or due to be built within the next few years.
As well as being a potentially good investment, buying off-plan property has other advantages.Firstly, if you do not decide to sell the property you will be buying for yourself at a very discounted price, below market value. This tends to happen as developers like to demonstrate a certain level of sales prior to marketing the property in a bid to sell as many units prior to completion. In certain cases developers can even offer further discounts to those willing to purchase multiple units.
Another advantage is that in certain cases, the discounted prices mentioned above can even be allowed to be paid in installments as the property is being completed.
In addition to the potential financial benefits, off-plan buyers also get the advantage of moving into a spanking new property and all the advantages that come with that, such as up to ate construction, modern fittings, clean walls, etc. With off-plan because the property has not been constructed you can be involved in decision making processes on how the property is built and personalise your home with tiles of your choice, kitchen fittings of your choice and other interior decoration elements.
However, there are also risks in investing/purchasing off-plan. One of the main risks is the developer and whether you can trust him/her, if you do not opt for a developer with a good reputation of starting, finishing and maintaining developments you might be at risk. The risks involved could be that the property takes a lot longer to develop than was previously stated and this can come with issues such as having to pay rent somewhere longer than intended. When the property is completed whether or not it was in a timely manner the outcome of the construction could be a problem if it does not live up to the standards communicated prior, this will affect both the experience of the homeowner and the value of the investment.
In conclusion, investing in off-plan property can be a good idea if you trust the developer to complete the job to the right standards in a timely fashion, if the development is in a promising location, that is tried and tested as you are more likely to get a higher return on investment.
If you are interested in buying off-plan please consult us at Demaxon to get the best deals with reputable real estate developers.
