Why buy off plan?
Buying off plan simply means purchasing a property from architects' drawings, as opposed to a finished building. Typically these drawings are presented in the form of a sales brochure from the developer. Planning permission will have been granted, but the building work will not have been completed.
This is usually the most cost effective way of purchasing a property. To a developer, time is money. Developers want to sell their product quickly and will therefore price their product accordingly. The quicker they can finance and build their development, the quicker they can take their profit and start the process all over again. This is one of the main reasons property investors buy off plan. Below are some other reasons why you should seriously consider off plan property as an investment:
- You more often than not, buy under market value regardless of the market.
- You do not have to tie up all your money in one go, allowing you to free up money for other investments.
- It takes a lot less time and effort on your part.
- Most of your research is carried out for you.
- Developers purchase their building materials in bulk, therefore passing the savings on to you.
- You can resell before, during or after construction.
- The investor avoids paying any resale premiums.
- Past experiences suggest your property will usually appreciate in value during the construction phase.
- If your property is part of a large master planned development there will usually be a substantial increase in property values upon completion of the whole development, especially if you get in early. e.g. Phase One.
- Low maintenance costs and a builder's construction warranty, saving you considerable money over the long term.
- Portfolio diversification.
- Easier and cheaper to customise the property during the construction phase.
- Greater choice of property available.
- Some payment structures allow you to pay affordable installments, thus avoiding the need to arrange a mortgage.