Buying an off the plan property can be a great way for first time investors to get into the real estate market, as well as a fantastic way for existing property investors to build a portfolio for the future. There are so many advantages to considering an off the plan apartment rather than an existing property, however there are a number of factors you need to keep in mind before embarking on such a course of action. Getting timely, professional advice from property experts is a critical component to making the right strategic decisions and avoiding the mistakes that first time investors often find themselves making.
Property experts suggest that there are a number of tips that first time investors should consider when considering purchasing a property. These include:
Be organised about your finances. This means doing your homework in terms of your current financial position and outlook, your borrowing and repayment capacity as well reviewing the different loans from banks and other lenders. When you go to meetings with property investment companies or developers take any relevant financial material along with you so that you will be as prepared as possible.
Conduct research. Becoming an investor, or building an existing property portfolio is not simply a matter of turning up, handing over your deposit and signing on a dotted line. Being a fully informed investor means conducting research and exploring issues such as the type of property you wish to purchase, different suburbs (or cities) that are currently offering value for money and capital growth, and associated vacancy rates and demographics. Once you narrow your search to a few suitable areas, also consider factors such as transport links, shopping and schools. It is also important to do research into any developers that you may be interested in, including the track record and quality of past developments, and relationships between the developer, builder and sales agent. Many good property investment companies such as Ironfish can help point you in the right direction and give you the benefit of years of property investment experience.
Study the contract terms carefully. If you have chosen a developer’s project than the next step is to look at any contract of sale and get professional independent legal advice. Buying an off the plan property will involve a number of terms and concepts that you need to be aware of, including time frames surrounding completion of the project and what are known as “sunset clauses” which may allow buyers and developers to walk away from an original agreement at no cost if the development time runs over the planned schedule. As with all investments, there are a number of risk factors associated with buying an off the plan property including projects not being built and the finished property being different to what you expected. In these cases it is important to understand the original contract and your options.
Buying an off the plan property as an investment can be very exciting, but it can also be a little overwhelming without prior experience or without professional advice and support. One of the best property investment tips is to find a reputable and professional investment company that can give you timely information and take you through the process step by step.