Buying Off-the-Plan as an Investment

The number of off-the-plan apartments being sold is on the increase, with developers needing pre-sales to get a project off the ground. However, is buying off-the-plan a good investment?

Property Observer took a look:

For John Carfi, the chief executive officer at Mirvac residential, buying off-the-plan can be a smart move when done correctly. The potential is for great returns, a stable rental income and capital gain tax, as well as tax benefits from depreciation and negative gearing. By buying pre-construction, you can usually secure your apartment at a cheaper rate than once it’s been developed.

Firstly, you must ensure the developer is reputable as you are essentially putting your faith in the developer and builder. As for the returns, that all depends on whether you plan to rent the property or ‘flip’ it for a quick profit.

Flipping is a risky game to play and might not always work out how you hoped it would. To flip is to presume that the market will rise just before settlement, and this is not always the case.

Your best bet is to look for off-the-plan apartments close to amenities, public transport, schools and shops, where you are guaranteed tenants and most likely, a higher rent.