Print ArticleAn off-plan property investment is the purchase of a property during its planning or construction phase, before it is actually completed. In many cases, development has not even started or will take longer than three months to complete. Investing in an off-plan property is buying into yet-unturned earth; as it could be a long time before construction is due to begin.
The off-plan property investment strategy has become increasingly popular with forward-thinking investors in recent years. There is a huge growth potential because the uncompleted property is purchased at a price well below market value.
The general rule in off-plan investments is to jump into the bandwagon early. It is so much easier to secure a prime plot while the development is still in its beginning stages. However, there are some off-plan investments that just sounds too good to be true, and most of the time they are. Many investors have been misled into a dubious scheme. The development never materializes and the buyer ends up with a worthless piece of muddy hole in the ground. Off-plan investment is like buying into an intangible. It is very much a buyer-beware investment scheme.
Most of the time, off-plan investments are heavily promoted. Marketing begins at a launch date, usually a big PR event complete with building models, glossy brochures and fancy parties. It is wise to ignore the hype and keep your head. After all, a piece of property should not be an impulse purchase.
Lured by the very low price, many people make rash decisions when it comes to off-plan investments. It is essential to research on the property itself and the developers. More importantly, investors should gain a know-how on how the system of off-plan investments work and its benefits and risks.
Buying a property that is still a castle in the sky is a very risky business not for the faint of heart. Investing in off-plan properties is one big gamble. For the wise, it is one very good property investment at a bargain price.
Legitimate off-plan property investments are very profitable. By purchasing a property at well below its current market price, its value will surely rise by the time development is completed. This translates into an immediate significant return on investment. Furthermore, you are ensured that the building development is new. Thus, there is no need to worry about wear and tear, maintenance and expensive repairs. Off-plan properties are also a very good option for buy to let investors, as developments in up-and-coming areas are usually the best deals available.
On the downside, there is not a 100% guarantee that the development will be completed on time, or if it will be completed at all. For this reason, consider only properties from credible developers or those with a proven track record. Moreover, not all properties are easy to sell at completion. Factors that change the supply and demand of the market come into play.
Ultimately, consider if the numbers add up to make a profitable investment. Assess the property´s price relative to current market prices and the price of similarly situated properties. Consider the growth potential of the area where the development is situated. Get a feel of the market´s rental demand and the current supply situation. There could be too many investors buying into that development which could make finding tenants difficult. Finally, make sure that the rental price will still yield you a profit – enough to cover mortgage cost and other expenses.
The off-plan property investment strategy has become increasingly popular with forward-thinking investors in recent years. There is a huge growth potential because the uncompleted property is purchased at a price well below market value.
The general rule in off-plan investments is to jump into the bandwagon early. It is so much easier to secure a prime plot while the development is still in its beginning stages. However, there are some off-plan investments that just sounds too good to be true, and most of the time they are. Many investors have been misled into a dubious scheme. The development never materializes and the buyer ends up with a worthless piece of muddy hole in the ground. Off-plan investment is like buying into an intangible. It is very much a buyer-beware investment scheme.
Most of the time, off-plan investments are heavily promoted. Marketing begins at a launch date, usually a big PR event complete with building models, glossy brochures and fancy parties. It is wise to ignore the hype and keep your head. After all, a piece of property should not be an impulse purchase.
Lured by the very low price, many people make rash decisions when it comes to off-plan investments. It is essential to research on the property itself and the developers. More importantly, investors should gain a know-how on how the system of off-plan investments work and its benefits and risks.
Buying a property that is still a castle in the sky is a very risky business not for the faint of heart. Investing in off-plan properties is one big gamble. For the wise, it is one very good property investment at a bargain price.
Legitimate off-plan property investments are very profitable. By purchasing a property at well below its current market price, its value will surely rise by the time development is completed. This translates into an immediate significant return on investment. Furthermore, you are ensured that the building development is new. Thus, there is no need to worry about wear and tear, maintenance and expensive repairs. Off-plan properties are also a very good option for buy to let investors, as developments in up-and-coming areas are usually the best deals available.
On the downside, there is not a 100% guarantee that the development will be completed on time, or if it will be completed at all. For this reason, consider only properties from credible developers or those with a proven track record. Moreover, not all properties are easy to sell at completion. Factors that change the supply and demand of the market come into play.
Ultimately, consider if the numbers add up to make a profitable investment. Assess the property´s price relative to current market prices and the price of similarly situated properties. Consider the growth potential of the area where the development is situated. Get a feel of the market´s rental demand and the current supply situation. There could be too many investors buying into that development which could make finding tenants difficult. Finally, make sure that the rental price will still yield you a profit – enough to cover mortgage cost and other expenses.
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