Blog: 5 tips for buying off-the-plan property
Purchasing off-the-plan can be a great way for investors to make a profit, but his technique has a few downsides you should be aware of.
Buying off-the-plan means you are purchasing a property that is yet to be constructed, so while you can see the design and building plans, there is no physical property to look at.
Generally, property prices increase as time goes on, so many investors find they make a profit once the house is built. Still, there are no guarantees.
If you do decide to take the plunge, there are a few tips to bear in mind.
Find out the building company behind the project and see if you can go and have a look at some of their previous developments.You may also want to check the company's track record to see how well it delivers on its its plans.
Supply and demand
The housing market works on this basic economic premise, so if there are lots of developments planned in the area, it might be best to have a look at other suburbs to avoid investing in a saturated market where house prices are likely to fall.
Get in early
Developers often release the cheapest properties earlier because they need fast sales to ensure the project gets the go-ahead.
The early bird catches the worm, or in this case, the best piece of land. If you get in early, chances are you will have your pick of sections so you can choose one that works best for you.
Check all relevant documents
Before you commit to an off-the-plan property, you should receive a full set of drawing plans with the appropriate measurements.
This will give you a gauge for what you're getting yourself into.
Take note of the strata fees
Ensure you are aware of these annual fees so you can plan for this cost in your budget and don't receive a shock when the first bill comes through.
It is also important to work out your budget ahead of time so you can organise an appropriate investment loan.