Off Plan Property Investment
Ahmad FisherOff Plan Property Investment
is a low cost opportunity that can provide a high return on investment. When buying property \’off-plan\’, you are purchasing a property based on the developer\’s drawings, impressions, floor plans and proposals. In many cases, the developer may not even have started building the property yet. A shortage of suitable existing rental properties on the market combined with the poor performance of the stock market in recent months has led many property investors to take a fresh look at off-plan
The main advantage of buying property off plan is that it is usually cheaper than if you were to buy it completed. Typically, you can expect to be offered a 20 per cent discount on the purchase price. You can get a high return on your off plan property investment by agreeing a deal at today\’s prices for a purchase in the future.
The off plan
process typically requires the buyer to pay a token \’reservation payment\’, to indicate that they are serious about the purchase. A deposit of 5-10 per cent is payable on exchange of contracts. This deposit is much lower than that needed for a completed property.
Investing in off plan property at an early stage of the development also allows you to have input in the final layout and finishing of your property. You can tailor your property to the specific requirements of the type of tenant you have in mind. Payments for off plan property investments are staggered, which helps to ease your cash flow.
Many off plan property investment schemes guarantee rental income for a fixed period, which may reduce your risk as a property investor. Once the property is completed, you may decide whether to sell it on or find a tenant for it.
Although you usually will not own the property legally until completion, you could consider \’flipping\’ the property – selling it before completion in order to make a profit from the capital growth. \’Flipping\’ – or \’turning\’ – a property means you make one or more smaller payments. You do not have to pay stamp duty fees on your property, provided you manage to find a buyer before completion.
It is important that you get independent legal advice to ensure that your rights and investment are protected during the construction process. This will include guarantees on the quality and structure of the finished building.
Off plan property investment requires you to conduct extensive research into the development and surrounding area. This should take into account what the location will be like in years to come, the area\’s infrastructure and whether nearby locations may be developed in future that could enhance or damage your investment\’s potential.
You will need to have full confidence that the completed
will live up to the promises made in the computer generated images and the developer\’s glossy brochures.
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