If you’re involved with property investment, then you’ve probably heard of “off the plan” property before. When you buy an off the plan property, you’re paying for a piece of land before construction is incomplete. With some lots, the construction may not have even begun. While these investments can be lucrative, they call for certain precautions. Here are some handy tips for buying land off the plan.
My first tip is to avoid rushing into any deals. Before buying an off the plan property, it’s important to do a lot of research into both the property and the developer. It will help to look into any completed projects made by the same builder, and any differences between your property and the display suite. Fixtures and fittings, strata levies and other costs should be taken into account as well. It also helps to look into the purchase and rental prices for other properties in the same area. This will ensure you don’t pay an unfair price for your off the plan property. Looking into all the details of a plot is one of the most important things to keep in mind when buying off-the-plan land, so don’t neglect it!
Make sure you have a good solicitor or conveyancer in your camp when it comes to off the plan land. The contracts for buying off the plan property is slightly different than existing properties. There are a few extra clauses which don’t appear in the contracts for regular properties. Some of these clauses give the developer a lot of power over how the construction goes ahead. They may be able to change the building’s design, push the completion date further ahead, or even change the sale price. Obviously, with these kinds of aspects at risk, you’ll want to make sure a legal professional combs through it all. If you fail to understand your position, you may end up losing a lot of money.
You should also make sure you know all the deposit requirements you’ll have to meet. In most cases, buying a property off the plan requires you to put down 10%. Some developers prefer cash deposits, others will ask you for a bank guarantee, and others still want buyers to use a deposit bond. Each of these kinds of deposits will have different conditions tied to them, so make sure you talk it over with your financial advisor. They’ll be able to manage the deposit, and sort out the payment process on your behalf. Talk to them about getting a loan pre-approval as well. This will give you the peace of mind that the loan will be all sorted by the time the settlement comes. There will be a lot of choices available here, so talk it through with whoever’s in charge of your finances.
If you execute it in the right way, buying off the plan property can be a brilliant investment. You won’t be at any real risk unless you go into it without understanding the little differences.