If you want to invest in off-plan property, then there is always one obvious selling point: the price. As we are aware of, cheaper prices bring misfortunes and opportunities alike. Therefore, it’s all too easy and common for a buyer, especially an inexperienced one, to succumb to the same mistakes as buyers before them. You will have plenty of options to consider while making an off-plan investment. Because with small deposits and low front costs, you can afford an ideal property in a perfect neighborhood. Not only this, but off-plan properties can also offer significant benefits, as they have a greater potential for growth and profitability.
In order to ensure you make the most of your off-plan investments, this article covers everything you need to know before you take the plunge.
Is It Worth Buying the Off-Plan Property?
If your property is a house it’s almost always worth buying the off-plan. Because there’s no real reason why you should be paying additional money for the land it’s built on. But then there are those who make an off-plan investment in a wish to increase their investment portfolio and capital growth. They are among those parameters that help you evaluate the success of specific buy-to-let property investment. Moreover, it is becoming one of the greatest means to get a great rental return as well.
Buying an off-plan means you are entering into the deal for a property that is either on its way of completion or the construction that is barely even started. That is to say, you are going to secure the lowest entry price. Because developers tend to offer lower prices for these properties for sale during the earliest stage of development to attract investors.
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If the area predicts a strong growth, then there are bright chances that the investment will greatly increase in value, even if the area is under construction.
How to Find a Right Location?
If you are planning to buy off-plan, the location is just as important as if you are buying an existing property. The neighborhoods that appeal to you will largely be a matter of personal choice. However, there are three factors that are the most important: accessibility, appearance, and amenities. Your neighborhood may also dictate the size of the lot on which you are planning to build your house.
For buy-to-let investors, one of the main factors they consider is the strength of rental demand in the chosen area. For example, if they plan to buy a freehold property in Dubai, then they always choose that locality that is in close proximity to the major roads, schools or business activities. This will help them get greater rental yields.
How Funds Are Safeguarded?
If you choose credible developers, then they will surely be going to protect your funds during the construction period. Most off-plan investments demand an initial down payment. This is one of the best ways to secure the property, and increase credibility.
The developer will allocate your funds in one purpose account. And they will be released once the construction is complete. Moreover, a good property developer will update you by giving monthly or quarterly updates. They will also tell you about the areas in which they have invested your funds.
What Is the Buying Process?
The process is very straight forward and crystal clear. You need to sign a relevant sale and purchase agreement with your developer. This is the best way to protect your own interests. In this case, you should take proper legal guidance. A solicitor would be helpful as he can review the contracts and confirm greater protection.
Moreover, if you want to confirm that the developers will complete the construction in due time, then establish legal protection. This will come in handy if the developer delays the construction. In the case of stage payments, it is pertinent for you to understand what percentages are due during the construction works.
Who Will Manage the Off-Plan Property?
You may go for an off-plan buy-to-let apartment within a new building. An onsite management company will manage this. Moreover, a good property management company will also help you find good tenants as well. They will maintain your property throughout each tenancy. This will enable the landlords to get maximum returns from the property.
How to Make Sure that Property Delivery is on Schedule?
With off-plan investments, timing is everything. The sooner the developers build your property, the earlier you will start earning profit. One of the best solutions for this is to choose a well-reputable and experienced developer. You must see the portfolio of their previous projects. This will help you determine their expertise and commitment to their work.
How to Ensure that the Property Meets the Promised Standards?
In order to remain satisfied and gain actual peace of mind, select a development that comes with a warranty. This will be for a definite period of time. In addition, the developers should give you the protection of your new build home as well. This will help you save from the trouble that may occur in the future.
All in all, buying off-plan properties has gathered a lot of attention nowadays. Investors are spoilt for choice when it comes to off-plan projects around the world. But before you make any decision, you need to understand all the pros and cons of the area in which you are planning to buy. To clarify, look before you leap!