A Guide To Off The Plan Property
It has been said that purchasing an existing property is “buying the present”, whereas buying an off the plan property is really “buying a dream”. Investors buying off the plan properties is becoming more widespread, particularly now as it has been estimated that Australia is undergoing an apartment boom, with billions scheduled for developed in the next few years. For anyone considering investing in property an off the plan apartment can provide long term benefits with minimal ongoing hassle.
What Is An Off The Plan Property?
Essentially off the plan properties are where you can purchase or lock in “ownership” of a property that has not yet been built. You will literally be buying “off the plan”, although the majority of developers these days provide mock ups or display units so that prospective buyers can see what they might be purchasing. A huge advantage of off the plan developments is that you generally only have to invest a minimum deposit (normally 10% of the total price) initially, and then settle the full amount later. This has two benefits: firstly, it means that you will have a good amount of time to get your finances in order, and secondly, that with property values increasing over time, by the time you have to pay in full for it there is a chance that the property will be worth more than its initial value.
Other advantages to looking at an off the plan property include:
- Having first pick of the properties in a development. This can make a crucial difference to the value of the property down the track, but also its appeal to potential tenants. For example, being able to choose a quiet, north or north-east facing apartment in a block with plenty of natural light can mean that your apartment will always be in demand among renters.
- Being able to purchase a property and wait while it is being built gives you time to find suitable property management. It is a good idea to see if the company you dealt with to buy the property can also manage it going forward.
Who Should Consider Investing In An Off The Plan Property?
When asked this question, the majority of professional property experts would reply that off the plan properties are a great option for those just starting out in investment, anyone looking for a way to build assets with income and good long term capital growth prospects, and experienced investors who want to build a substantial property portfolio – so essentially anyone who is interested in investing in property.
Having said that, it’s obviously important not just to hand over your deposit to the first off the plan development you come across. Doing research on the developers, as well as the type of development and its location, are all important factors in choosing the right off the plan property for you.